Is Uncle Sam still paying the rent?
Fed government leases more than 6M sf of office in the NY metro area
Uncle Sam (Credit: iStock)
Could the government shutdown hit commercial landlords’ wallets?
The General Services Administration is the largest public real estate organization in the nation, providing space for more than 1.2 million federal workers, according to Bloomberg News.
The greater New York metro area is second only to the areas around Washington, D.C. and Virginia in terms of square footage leased by the GSA. The federal government leases more than 6 million square feet in the area spanning New York, New Jersey and Pennsylvania, according to Bloomberg.
That adds up to $283 million per year in rent payments.
But judging from past shutdowns, the impact on landlords could depend on how long this stretch lasts.
Joseph Brennan, a managing director at JLL, previously told Bisnow that landlords don’t have to worry in the short term, but a prolonged shutdown could cause trouble.
“It’s not going to hurt your investment,” he said. “They’re going to pay the rent, and you should fulfill your lease obligations … The broader question I don’t think anyone has the answer to is what happens if it goes 60 or 90 days and gets into two or three rent payments.”
The GSA in 2017 signed an 18-month lease to rent an apartment in Trump Tower. [Bloomberg, Bisnow] – Rich Bockmann
Source: The Real Deal Los Angeles