The debate over how Brexit—Britain’s exit from the European Union—will impact commercial real estate is still raging.
The truth is, nobody has all the answers but many have insight that seems logical.
Here’s what we know so far. According to the Wall Street Journal, Brexit’s effects are already starting to ripple through property markets as investors pile out of publicly traded real estate companies in Britain and Europe—and as global developers begin to reassess projects and transactions already in the pipeline.
But that’s Britain. How will it impact South Florida’s commercial real estate market? What fallout should we expect? Michael Lapointe, an executive managing director with NGKF Capital Markets, has some insights.
“With growing instability within the UK and European union, we are continuing to see a flight to safety capital in the short term and specifically to geographies such as the US,” Lapointe tells GlobeSt.com. “The theme of flight capital is not new. The US has been the beneficiary of foreign instability within South America and Russia, and now we expect that to continue as investors seek long term yield and safety combined with continued potential currency appreciation of the dollar.”
Drilling down to South Florida, Lapointe says real estate offers investors an “excellent” opportunity to earn long term income as well as tap into growth prospects not found in other mature US cities. Because of this, he argues, Miami and South Florida have become a top destination within the conversation of capital allocation amongst institutional and ultra-high net worth foreign investors.
“As nationalist rhetoric continues to make headlines, Miami has an underlying culture that celebrates international diversity and is rivaled by only a few major gateway cities in accommodating foreign business,” Lapointe says. “If anything, it strengthens our market overall relating to the majority of property types but office, retail and multifamily certainly as they attract more large international institutional capital with higher price points.”