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How the Government Shutdown May Affect You

Business Services & Best Practices Technology & Innovation Office

As a commercial real estate broker specializing in working with tenants and users in Washington, DC, I have been following the government shutdown anxiously this week. Right away two things jump out at me that could have a material impact on my business, and more importantly, my clients:

  1. If the Small Business Administration (SBA) is essentially “closed for business” for new loan applications, many companies could be out of luck when trying to finance a small building purchase. For years, the SBA has been a great resource for small companies looking to purchase a building or condominium interest. The interest rates have historically been very competitive and the SBA will loan to small companies when the traditional big banks have not. This could all go out the window!

    And who know about the current loans that are in the SBA’s pipeline. Could these loans be delayed? Or even worse, could the SBA simple say “we are closed?”

    The domino effect of this could be horrible for a buyer – hard money lost, interest rate uncertainty, delays on construction and overall pricing – and the list goes on.
  2. There are thousands of government contractors and non-profits in and around the area servicing the Federal Government. Many of the awarded contracts are short-term and up for renewal every year or so. The office and/or facility leases that these contractors and non-profits enter in to are based, and sometimes contingent, on the contracts themselves and whether or not the contracts are actually renewed.

    Because of the government shut down, will these contract renewals be delayed? Will they be renewed? Or even worse, will they even exist? Like item 1 above, the domino effect of this could be dramatic.

In what ways have you already seen it affect business?

Matthew D. Levin, SIOR, LEED AP

Matthew D. Levin, SIOR, LEED AP

Senior Vice President with West, Lane & Schlager Realty Advisors, LLC (“WLS”), specializes in tenant representation including financial and market analysis and long-term strategic planning. He has particular expertise in addressing the real estate needs of associations, nonprofit organizations and law firms and has worked extensively in the downtown Washington, DC office market.