WSJ What’s News - Trump Is Considering Selling Most of the Federal Government’s Real Estate

Episode Date: January 21, 2025

P.M. Edition for Jan. 21. The Trump administration is considering selling most of the offices maintained by a federal agency known as the General Services Administration. WSJ real estate reporter Deborah Acosta joins to discuss what the impact might be. Plus, more than a dozen attorneys general sue to stop President Trump’s executive order to end birthright citizenship. And after a difficult few years, some Hollywood workers are being pushed out of the industry due to the wildfires in Los Angeles. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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More than a dozen states sue to stop President Trump's executive order to end birthright citizenship. Plus, the Trump administration considers selling off most of the real estate held by the federal government. A lot of these buildings are sitting almost empty right now in Washington, D.C. And it's a problem that we're seeing nationwide. And what the Los Angeles wildfires mean for the workers that make Hollywood magic. It's Tuesday, January 21st. I'm Alex Osala for The Wall Street Journal.

This is the PM edition of What's News, the top headlines and business stories that move the world today. President Donald Trump has met with Republican leaders. According to people briefed on the plans, the meeting was intended to focus on how to implement Trump's agenda in Congress. With a narrow majority in Congress, House Speaker Mike Johnson and Senate Majority Leader John Thune have little room for error as they try to push through the president's sweeping plans for the tax code and the border. In a separate event today, three of the world's most prominent tech companies unveiled their AI

infrastructure plans at the White House. OpenAI, SoftBank, and Oracle promised to pour as much as half a trillion dollars into building artificial intelligence infrastructure in the U.S. It's the latest high-profile project timed with the start of the Trump administration. The companies are committing $100 billion to a joint venture called Stargate, with a plan to invest up to $500 billion over the next four years. The first project will be in Texas. Meanwhile, attorneys general for more than a dozen states have filed a lawsuit to stop the end of birthright citizenship after Trump signed an executive order to end it yesterday.

The lawsuit filed in Massachusetts said the executive order violates the 14th Amendment, which guarantees citizenship to, quote, all persons born or naturalized in the United States and subject to the jurisdiction thereof. The attorneys general are asking for a preliminary injunction to stop the executive order from taking effect. INTRO

Even the U.S. government has a landlord. It's a federal agency called the General Services Administration, and it manages hundreds of millions of square feet of the government's real estate across the country. Though the agency initially had a cozy relationship with the president, Trump has soured on the GSA and now the Trump administration is considering selling off two-thirds of the GSA's properties. I'm joined by Deborah Acosta who covers real estate for The Wall Street Journal. So, Deborah, what does the GSA's real estate portfolio look like? So they manage a massive portfolio of federal building, some of which the

federal government owns and some of which the federal government owns and some of which it leases from private entities. That consists of about 370 million square feet of office space and other types of buildings nationwide. But unfortunately, many of those have been poorly managed, they say due to lack of funding, and are sitting empty or underutilized. And that has become a big problem,

particularly in Washington, D.C., where a lot of this real estate is concentrated. Okay, so Trump has said that he plans to sell off most of the GSA's property. How big a shakeup would this actually be if it happens? I mean, it would be a pretty big deal. You have a lot of square footage in Washington, D that is actually leased from private entities, and they'd have to decide what to do with the properties. Would they foreclose on these properties? Would then the banks be affected regionally? That would remain to be seen.

But yeah, it would be a big problem because in particular, the GSA has been seen as like this gold standard of an entity that you can lease to because it's leasing to the federal government. And so if all of these landlords suddenly saw themselves without the GSA as their anchor tenant, that could spell a huge problem for DC, the real estate market there, and also the local banks in that area that lend to these landlords. What does GSA have to say about this plan? This is something Trump is weighing. This has been discussed within his transition team. The GSA is pointing to how they have already been working to minimize the size of their federal portfolio for the past few years and how they're committed to doing exactly this.

And they say that if they got more funding from Congress, then they could accelerate these actions. That was WSJ reporter Debra Acosta. Thanks so much for being here, Debra. Thank you, Alex. A winter storm hitting Texas, Louisiana, and other Gulf Coast states is creating transportation problems. Thousands of flights within or departing from the U.S. were canceled today, with additional

cancellations into Wednesday. Houston Airport suspended operations and schools in the city were closed. U.S. stocks were up today after promising reports about several companies and no immediate announcement from the White House about tariffs. The Dow was up about 1.2 percent, the S&P 500 rose approximately 0.9 percent, and the Nasdaq ended the day about 0.6 percent higher. Reporting fourth quarter earnings after the bell, Netflix said today that it brought in about 19 million new subscribers, a 44% jump from a year earlier.

The company reported revenue of $10.25 billion in the quarter, beating its own projection of $10.1 billion. Netflix also announced that it will raise prices on most of its plans in the U.S., Canada, Argentina, and Portugal. Its ad-supported tier will cost $7.99 a month, up from $6.99, while the cost of the premium tier is increasing by $2 to $24.99. Goldman Sachs announced today a number of promotions in its global banking and markets division, signaling the rise of a next generation of leadership. The promoted executives will

join a revamped and expanded version of the Bank's Management Committee, making them among the bank's highest ranking officials. Coming up, how the wildfires in LA are affecting Hollywood. That's after the break. It's been a tough few years for people in the film industry in Los Angeles. The industry was hit by the pandemic, strikes by actors and writers, and the continued migration of industry jobs out of the city.

Then came the wildfires. My colleague Pierre Bienneme spoke with Ellen Gamerman, who covers arts and culture for the Wall Street Journal, and asked her how the TV and movie industry in LA has been affected by the fires. At a very basic level, it's hurt the people who carry these productions on their back, the blue collar people, the gaffers, the riggers, moving, big lighting rigs and hauling sound equipment. They go pretty much unrecognized, but they really are crucial to keeping the

town running and they have hundreds of them lost homes. So you're seeing a lot of spreadsheets going around with huge lists of GoFundMe's. You know, these lists are 200 names long and their coworkers are trying to help them. And of course, this latest disruption by the fires comes after other challenges for Hollywood, like the writers and actors strikes just over a year ago. How has that affected the industry?

At the start of 2023, before the strikes, 35% of film and TV jobs were located in and around LA. That's according to a recent study. But that figure fell to 27% by the end of that year, 2023. And they're really seeing far fewer production days in LA as the business just migrates elsewhere. I spoke to a lot of writers, editors, others who work sort of in the backstage parts of this show business world. And it's do or die for a number of people that both ends, the very young

and the very old, the very young are seeing, ugh, this, everyone I know is not working. Why would I enter this business in this kind of role right now? And the older ones are saying, well, things are drying up. I might as well retire. That was WSJ reporter Ellen Gamerman speaking to my colleague Pierre Bienamay. Landing a professional job in the US has become so tough that even Harvard Business School says its MBAs can't rely solely on the university's name to open doors anymore.

23% of job-seeking Harvard MBAs who graduated last spring were still looking for work three months after leaving campus, up from 20% the year before. Reporter Lindsay Ellis told our Your Money Briefing podcast what's changed about the job market. Overall, it is a tough market for white collar workers. And companies are looking for people with direct experience in many cases,

making it harder for MBAs who may be trying to pivot into a new field from a degree program to make the case that they would be the exact right fit for an open position. Recruiters also, as recently as 2022, would come to campus early in the school year and would try and hire a ton of MBAs. And now companies are more apt to do virtual recruiting and they are hiring when they have a clearer sense of their business needs, which might be closer to graduation or even after. or even after. That all adds up to MBA graduates who came onto the market after leaving campus in 24, that they are having a more difficult time finding work

than those even two years prior. And you can hear more about this story in tomorrow's Your Money Briefing podcast. And that's What's News for this Tuesday afternoon. Before we go, heads up, we're gonna have a special bonus episode tomorrow midday. In What's News and Earnings, we'll be digging into the latest reports from big banks

for signs of what's in store for the economy. That'll be in the What's News feed tomorrow after our usual What's News morning show. Today's show was produced by Pierre Bienneme and Anthony Bansi, with supervising producer, Michael Kosmides. I'm Alex Osola for The Wall Street Journal. Thanks for listening.