The sunset is reflected in the windows of the US Capitol as a man runs on the National Mall in Washington, DC, on October 1, 2025, the first day of the US federal government shutdown.Andrew Caballero-reynolds | Afp | Getty ImagesA version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.When the government shuts down, real estate watchers tend to focus first on the impact to the residential market. Potentially thousands of home sales will be held up because the federal flood insurance program is no longer able to issue new policies; the Federal Housing Administration, Department of Veteran Affairs and Department of Agriculture might slow or suspend their mortgage processing; and the IRS might not process tax transcripts or income verification documents as quickly.But the impact to commercial real estate, while not quite as immediate, is much more far-reaching. A government shutdown delays government data on the economy. It causes uncertainty in the financial markets and, consequently, commercial real estate dealmaking, especially for small businesses. It also hits investor confidence. Finally, but most immediately, it causes a pullback in consumer demand for certain sectors.According to a post from the Commercial Real Estate Alliance (CREA), potential ramifications include:Reduced demand for CRE as businesses and government agencies delay or cancel leasing and development projects.Greater difficulty for CRE 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 CRE development projects.Get Property Play directly to your inboxCNBC’s Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox.Subscribe here to get access today.Economic dataThe government shutdown meant t …
