Brexit may affect real estate market at home

Illinois residents have likely read the news about the U.K.'s June decision to exit the European Union, a move that has been nicknamed 'Brexit." Commercial real estate investors may be interested in how this international event will affect properties in the U.K. and the international real estate market as a whole.

So far, there has been evidence that stock markets reacted negatively to the Brexit. Time will tell if Brexit causes property prices in the U.K. to go down as well. The head of global real estate firm Savills said that he expects a decrease in demand for U.K. properties from investors over the next year that will lead to lower prices. However, he thinks that this decline will only be a short-term reaction.

Brexit could affect the U.S. commercial real estate market if international investors pull their capital out of the U.K. and invest in U.S. properties instead. Middle East investors tend to favor real estate in London, but they could start purchasing properties in New York if properties in London lose value. Some analysts say that Brexit will affect real estate markets in the U.K. and the E.U. and won't be felt very strongly in the U.S.

The move could have an impact on both investors and developers, An attorney could assist a property owner with any legal documents that are required in order to sell a property to an international buyer. If there is a dispute over an international real estate transaction, an attorney may be able to help negotiate a settlement.

Source: National Real Estate Investor, "Brexit Could Bring More CRE Investors to U.S. Shores," Diana Bell, June 24, 2016

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