How Will Brexit Impact the US Real Estate Industry?

The UK has recently voted to leave the European Union. This referendum is being called “Brexit.” It has many economists in the United States wondering what the impact will be on the US economy. Those in the real estate industry are concerned about the possible effects it will have on the US real estate market, especially in the commercial arena. Of course, no one knows for sure how things will play out. However, there are a few different theories on what could happen.

The UK comprises 20% of cumulative foreign investments in the US. Therefore, uncertainty in the market could negatively affect the US. Britain’s exit from the EU is a huge transition and will likely createa lot of confusion. The basic theory here is that Brexit could be very bad for all US investors, including the real estate market. If the cost of capital increases and foreign direct investments decrease, it would be a problem.

Others believe Brexit will have little impact on the US economy. The move will likely produce some issues for the UK and the EU. Some US sectors will be affected like export businesses, including agriculture and technology. Port related industrial properties and the financial industry may also be influenced. However, the real estate industry is not likely to feel a significant impact.

Only time will tell what sort of effects Brexit will have on the US and the global economy. There are several distinct opinions about the topic. The foremost thing to do as a real estate professional is to stay informed about the issue. This way, you can make educated decisions about what is best for you and your business.