Landlords Brace for Fallout from Government Shutdown That Could Slow Real Estate Activity

GSA Leasing & Federal Real Estate attorney Gordon Griffin was interviewed by CoStar about how the government shutdown will affect federal government leases and rent payments. He clarified that the U.S. General Services Administration (GSA), which manages the government's real estate portfolio, will not be able to expend funds that are not yet appropriated, but funds already approved as part of prior appropriations processes should remain unaffected. This means that landlords can expect rent to be paid on time for September, October and November. However, Mr. Griffin cautioned, GSA's carryover funds will run out after about six weeks, at which points rent payments would be disrupted.

"It's extremely likely that all September rents will be paid today on time," he said. "We have never actually encountered a shutdown that has lasted long enough to directly have mass impacts, or widespread impacts, on the payment of rent on GSA leasing...[Six weeks] is really just one more data point that I think makes it look a little bit riskier and a little more dangerous to the private sector, to the development community and to the lending community."

READ: Landlords Brace for Fallout from Government Shutdown That Could Slow Real Estate Activity