Around $12 billion of loans tied to commercial mortgage bonds may be at risk as a result of the Department of Government Efficiency’s (DOGE) plan to cut federal spending by streamlining the government's real estate footprint. This is according to a Barclays PLC analysis reported by Bloomberg.

Within just a week of the start of cost-cutting action, leases on 22 properties have been canceled as more than 7,500 federal government leases come under scrutiny for possible closure. CMBS loans with exposure to General Services Administration (GSA) leases are at an increased risk of default, Bloomberg reported. Up to $28 billion of CMBS loans share an address with a property on the government’s leased property list, of which $12 billion is allocated on a property level.

Office properties are the most exposed at 87%, according to Barclays. Meanwhile, Washington, D.C., is the most exposed city to government leases with just over $6 billion. The nation’s capital is already contending with a 17.2% vacancy rate, the Bloomberg report said.