WASHINGTON, DC-More bad news from Washington--and no, that does not refer to the House of Representatives’ inability to push forward with a vote about the debt ceiling. Rather, the Commerce Department has reported that gross domestic product grew at an annual rate of 1.3% in the second quarter, and that first quarter growth had been revised to 0.4% from its earlier estimate of 1.7%. By any measure, revised or not, growth is clearly slowing, even without the looming specter of the strategic default of U.S. debt, and/or a downgrade by one of the rating agencies.

Not surprisingly, the commercial real estate industry is getting nervous. Signs of this was apparent in June’s Architecture Billings Index score, released earlier this month. It was 46.3, almost a full point from a reading of 47.2 the previous month, and at least some of that decline is due to a growing fearfulness over a possible default, AIA chief economist Kermit Baker, tells GlobeSt.com. There are anecdotal signs that it is leading to higher borrowing rates for real estate, he explains. “Definitely there is a new hesitancy to forge ahead with some projects because of the hold up,” Baker says.

If there is a default, commercial real estate lending will be the least of the US problems, Dan Fasulo, managing director of Real Capital Analytics tells GlobeSt.com. “If the US government debt isn’t AAA then what is,” he rhetorically asks. One likely fallout from a default or ratings downgrade is that real estate risk will carry a bigger premium. “There is nowhere to hide anymore for investors,” Fasulo says.