What part of the Constitution prohibits the federal government from holding real estate?
For one, any real estate that was seized under civil asset forfeiture where the owners were never charged and convicted of a crime that included the value of that land as a reasonable fine.
Civil asset forfeiture is legalized theft, where Cops take your property and force you to sue to have it returned. Often the cost to fight it in court is not worth the effort and still risk not getting everything you sued for.
That happens at all levels of the justice system -- federal, state and local.
The part of the Constitution that prohibits this practice is the 4th amendment barring the government from unreasonable searches and seizures as well as the requirement for due process under the 14th. How can they fine you for something they never charged you with or took you to court over?
They take it, and then they keep it if you don't pay to get it back.
Sometimes they even offer to give you back part of your property to settle the case. No admission on your part of guilt, and no justification for keeping it. They just know you will spend that amount fighting the seizure. It's the definition of extortion.
One case the local cops gave the property of someone to the feds -- a process where the feds get to keep most of it and the locals receive a portion later. When ordered by the court to return it, the locals said, "But we don't have it any longer." As if that's an actual argument against complying with the court order!
Totally unconstitutional, but lawmakers don't care, and the majority of the public will never imagine themselves in such a situation. They rationalize that the seizures are "ill gotten gains" and the crooks deserve to have it taken.