Landlords brace for fallout from government shutdown that could slow real estate activity

Federal lease payments, construction projects face delays if stalemate drags on, analysts say

The federal government shutdown now underway could disrupt plans for the federal real estate portfolio and put office landlords at risk of rent payment delays if a resolution isn`t reached in coming weeks.

Shutdowns can eventually slow federal contracting, leasing and the disposition of government properties, analysts said, though building owners with federal tenants are expected to keep receiving rent for now. At least two real estate investment trusts warned this year that an elongated shutdown could adversely affect their performance.

In the absence of appropriations, the General Services Administration, the government’s real estate manager, said its buildings would remain open to occupants and that the agency would retain “adequate staffing” to protect federal property under its custody and control. Still, the GSA on Wednesday called for an end to the shutdown...

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RSK: Well, one thing is certain, there are risks and rewards in CRE investments and this is an example of the risk.