Brexit, the unfortunately named abbreviation for the British vote to exit the European Union, seems like a decision that will impact commercial real estate in London, and other U.K. cities negatively.
But several reports coming out have good news regarding commercial, and residential, real estate in the United States.
Apparently, Britain’s exit from the E.U. will drive commercial real estate prices up in gateway cities in the United States, according to a research analyst at CoStar. Foreign capital is expected to see a bump in investment in cities such as New York, San Francisco, Los Angeles, Boston and Washington, D.C. Miami is also expected to see a boost in commercial real estate prices.
Another viewpoint is that a potential increased valuation of the U.S. dollar versus the British pound could also drive up the prices of U.S. commercial real estate, as less investors will be interested in U.K. properties. However, this could potentially mean that cheaper prices in Europe could potentially spur some investment on the continent, and in Britain, for those looking for long-term upside returns.
On the retail front, two large retail chains, Marks & Spencer and Sports Direct, are expected to suffer from the Brexit decision. But this could also potentially boost the U.S. retail real estate situation. European fast-fashion retailers, such as Topshop and H&M, are thriving in the United States. For growth potential, our economy could seem like a better bet than other markets during this turmoil.
What are your opinions on the Brexit implications of CRE?