While real estate watchers tend to focus on the residential market when looking for government shutdown impacts, experts warn that the effect on commercial real estate, while not as immediate, could be more far-reaching, CNBC writes.
A government shutdown causes uncertainty in the financial markets as investors and dealmakers—especially small business owners—are left without government data on the economy. Most immediately, experts say, it causes a pullback in consumer demand for certain sectors.
The Commercial Real Estate Alliance says that potential far-reaching impacts include:
- Reduced demand for commercial real estate as businesses and government agencies delay or cancel leasing and development projects.
- Greater difficulty for commercial real estate investors and developers to obtain financing and conduct transactions amid uncertainty and market volatility.
- Delayed approvals of permits or other government sign-offs necessary for commercial real estate development projects.
If the shutdown continues, economic data on construction spending, housing starts and building permits will not be released by the Census Bureau. Those are all key for multifamily investors, experts warn.