There’s a new federal executive order—and while it might not be grabbing headlines, it could be a game changer for commercial real estate in the Midstate.
On April 15, 2025, the White House issued an order that unwinds location rules for federal office space. Until now, agencies were strongly encouraged (and often required) to lease space in downtown urban areas, especially historic cores and central business districts (CBDs). This requirement is now officially gone.
So, what does that mean? Places like Harrisburg’s suburbs, York, Lebanon, Carlisle, and other non-urban areas could suddenly be in the running for federal leases. That shift could be a big opportunity for the Midstate.
What’s Changed?
This new order will allow federal agencies to prioritize cost savings, flexibility, and mission needs over location requirements. Instead of focusing on downtown properties, agencies can now look at more affordable, efficient spaces—regardless of location.
For regions like Central PA, where there’s a healthy inventory of affordable office and flex space (and much of it outside city cores), the Executive Order opens up new business development opportunities.
What are the Economic Benefits to Central PA?
- More Properties will Potentially Qualify for Federal Leases: Federal agencies’ ability to relocate means more suburban and rural properties are a consideration for federal use. This will benefit local municipalities and their local businesses who can provide services to the relocated agencies, helping small business growth.
- Adaptive Reuse in on-the-Table: With a nationwide push to cut down on underused space, there’s growing potential to repurpose vacant retail, flex, or light industrial space into federal offices. The Midstate has plenty of spaces ideal for adaptable reuse which will benefit a large segment of our construction trades.
- The “Space Match” Opportunities: Property owners with vacant or underutilized space near existing federal facilities—such as VA centers or military installations like Fort Indiantown Gap—could potentially offer lease-back or shared space solutions.
Compared to larger metro areas, Central PA boasts lower lease rates, more access to parking, and logistical advantages, making it more attractive under the new site-selection criteria. Commercial real estate professionals can capitalize by marketing properties that offer operational efficiency at lower cost.
How to Prepare for New Federal Demand
If you’re in commercial real estate and looking to tap into federal opportunities, there are a few smart moves you can make.
- Take a closer look at your portfolio, especially properties near existing federal activity or within about 50 miles of a regional urban center.
- Connect with federal leasing contacts and the GSA to get a sense of what they need and when.
- Highlight what sets your properties apart—things like flexibility, strong security features, and cost savings can go a long way with public sector users.
A Window of Opportunity
At its core, this new federal policy is about modernizing how the government uses space—but for Central PA, it’s also a rare opening. With the region’s mix of available office inventory, lower lease rates in comparison to major markets, and existing infrastructure, local property owners and brokers are in a strong position to respond.
By getting ahead of the curve—reviewing your portfolio, engaging with federal contacts, and marketing the strengths of your space—you can help shape the next wave of federal leasing.
This isn’t just a policy shift. It’s an opportunity to put Central PA on the map in a new way.
Need support navigating the process or preparing sites for federal users? Landmark Commercial Realty is here to help.