Brexit Bonus Jul08

Brexit Bonus

While international markets reel in the aftermath of the Brexit vote, U.S. REITs and senior housing providers are well poised to not only survive, but thrive. It will be months before the international markets begin to feel the effects of the Brexit vote, and probably years before any real assessments can be made on the economic and political impacts of Britain’s decision to exit the European Union. With uncertainty and fear looming, Senior Housing News (SHN) presents a mostly reassuring profile explaining how the U.S. senior housing market can weather the storm. The bottom line: U.S. senior living providers will not only survive, but perhaps even thrive thanks to a mix of strong portfolios, stable property values, and domestic insularity. Evolving Circumstances There’s plenty to worry about in terms of Britain’s separation from the E.U. Many predicted complete economic Armageddon and while the U.S. stock market did experience a round of sell-offs and tanking stock values, overall international markets seem to be holding steady. Additionally, some REITS with senior housing in their portfolio actually performed quite well, with both Ventas and HCP ending the day on an upswing. Although a weakened British pound may introduce another layer of caution, slower expansion does not necessarily translate to catastrophe. In fact, many U.S. REITS may capitalize on the opportunity presented by a more favorable exchange rate by increasing property acquisitions in the U.K. “[Brexit] will give them more of the field to themselves because the levered investors are going to find debt financing somewhat difficult in the next couple of quarters,”  Keith Harris, London-based executive director for specialist markets at CBRE Limited, tells SHN. “…I think the international investor who can take a long view on currency hedging is going to be fine. If anything, the...