The Defense Department is asking Congress for broad new authority to directly sell military real estate, lease it back when it needs to and reinvest the cash from these sales into a number of defense priorities including infrastructure modernization and the Golden Dome initiative.

In a legislative proposal sent to Congress in July, the Pentagon asked lawmakers to give it the authority to sell its own property to “rapidly, on a pay-as-you-go basis, upgrade and modernize infrastructure such as barracks, ordnance magazine storage, port infrastructure, sensitive compartmented information facility and special access program facility space.” 

Selling off its real estate would also help the department fund the Trump administration’s ambitious Golden Dome missile defense system, southern border operations as well as development of artificial intelligence data centers.

Currently, the Defense Department does not have the authority to sell the property it owns — it has to go through the General Services Administration, which oversees the disposal of federal real property that federal agencies no longer need.

The proposal would allow the Pentagon to bypass much of the current GSA property disposal process so it can sell military real estate more quickly and have greater flexibility to spend that money. It would also create a special Treasury account where cash received from property sales would be deposited. 

DoD says the proceeds could be used for any installation management or infrastructure-related projects that the defense secretary deems to be “in the interest of national defense.” The legislation would also allow the defense secretary to transfer money from those sales into major defense procurement and modernization accounts. 

“The added flexibility for the secretary of defense to retain and use the cash proceeds for any installation management or infrastructure related purpose or to transfer the proceeds to specific existing defense accounts that the secretary of defense elects provides the secretary of defense with the ability to best utilize department resources to facilitate administration priorities,” defense officials wrote in the legislative proposal.

The Pentagon could also lease back sold facilities for up to 50 years. The department wants to structure those sale-leaseback agreements in a way that could reduce the upfront budget impact of long-term leases. 

Defense officials said granting the department this authority would have “no impact on the use of resources requested within the fiscal 2026 president’s budget.”

DoD would have to notify the congressional defense committees at least 14 days before completing the sale and submit a notice that the defense secretary has determined that the transaction is “advantageous to the United States.”

The authority would expire five years after the legislation is enacted. 

In the same legislative package, defense officials are asking Congress to grant the Pentagon greater flexibility to use cash generated from leasing its property. 

Specifically, DoD wants to get rid of a $500,000 annual payment cap on certain leaseback agreements, arguing the restriction has prevented the department from pursuing larger enhanced-use lease projects on military installations. 

Enhanced-use leases allow DoD to lease underutilized property to private developers while retaining ownership of the land. Developers can build or renovate facilities, and the Pentagon can lease back space it still needs while shifting some ownership, maintenance and construction costs to the private sector. 

Defense officials said removing the cap would allow the Pentagon to leverage private investment to modernize military infrastructure while reducing the cost of owning and maintaining facilities. 

“First, a leaseback eliminates or reduces the cost of ownership of an installation or facility, including operations, maintenance, sustainment, repair, recapitalization and other costs. Second, a leaseback leverages private investment, obviating the requirement to obtain upfront military construction funding and permitting the department a more flexible use of its operations and maintenance funding,” defense officials said.

DoD similarly wants to use revenue generated from these leases for installation management, infrastructure projects and other defense priorities. 

The proposal comes as the Defense Department faces longstanding challenges managing its massive real estate portfolio. The Defense Department oversees more than 700,000 facilities valued at roughly $2.2 trillion, but inconsistent property data and outdated utilization practices have made it difficult to identify excess facilities, explain what the properties are for and prioritize investments, according to the Government Accountability Office.

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