The federal government is a huge user of leased office space, with 179.3 million square feet in rentable square footage, according to the most recently available from the General Services Administration. That could be a sleeper issue for office property owners.

"Government buildings historically have been known to have stable property cash flow, as these government tenants don't move office locations frequently and often just renew their existing leases," noted Trepp. That is no longer a given. "However, with remote and hybrid work becoming a common option for private businesses and federal agencies alike, office occupancy in D.C. dropped 1.2 million square feet in 2022 and saw an overall 79.5% occupancy."

The shift isn't contained in the greater D.C. area. A General Accounting Office report in September 2022 indicated that most agencies are planning significant cutbacks in the amount of space they use. And none of this counts state and local government use of leased office space. The warning flag should be how much of the space is in actual use.