The major data breach at credit bureau Equifax is big news.

What will it mean for commercial real estate?

While the recent hurricanes have masked some of the alarming news about the Equifax data hack, it is major news that everyone should be monitoring. Somewhere between 50% to 100% of American’s have had sensitive data stolen in the past few weeks. That includes all the information needed to steal individuals’ identities and ruin their credit. What do commercial real estate investor and industry professionals need to know?

Although the extent of the breach and the conduct of Equifax executives is still under investigation, with 36 senators appealing to the DOJ, FTC, and SEC to get to the bottom of it, the impact is hoped to be far less harmful to commercial real estate investors than residential ones. Still, the breach also extended to UK and Canadian individuals, and Equifax does provide commercial credit reports as well. The direct impact should be less on commercial property investors due to the fact that they normally don’t rely on personal credit to cut deals or access financial leverage.

The biggest concern in this domain is probably the effect on frontline retailers. With ID theft and credit issues potentially affecting everyone, this could also lead to unprecedented numbers of chargebacks and charge-offs. This could truly hurt both brick and mortar and online stores. To avoid these runs, retailers may need to seriously beef up their cybersecurity, ID checks, and processes and labor for dealing with these disputed transactions. Some may look for payment processors who are more likely to side with them, than consumers. Commercial real estate landlords need to watch out for this, and the potential impact on performance of different types of tenants.

The above factors should be watched when it comes to approving new tenants. Some may not have the personal credit standing they once did, out of no fault of their own. Some will be more susceptible to risk than others. However, the biggest takeaway from the Equifax hacking scandal may be to watch who you lease to on the basis of their ethics and executive team. US senators are already calling for jail time for executives who dragged their feet on revealing the data breach, and selling millions in stock between the discovery and announcement. While still fluctuating, that news put an immediate 21% hit to Equifax shares, and the fallout could ultimately touch landlords leasing space to the giant international firm. Be careful who you lease to, because their actions could have more affect on your performance than you think.