While the U.K.'s decision to remove itself from the European Union has made global markets jittery, U.S. real estate market seems well-positioned to capitalize on events. Moreover, commercial real estate investment trusts (REITs) seem particularly ripe for foreign capital, including investment dollars from high net worth Brits and institutional investors looking to move their money into areas that seem less volatile
"The continued flight to the safe harbor of American properties in gateway markets like New York and San Francisco reflects persistent economic and political instability in other parts of the world," said Sam Chandan, founder and chief economist of Chandan Economics. "The U.K.'s decision to exit the European Union underscores the U.S. investment thesis and could trigger a new wave of foreign capital inflows to high-quality, well-located assets."
U.S. real estate offers relative safety and good yields, particularly in major cities. New York, San Francisco and other hubs are attractive because space is limited and properties tend to increase significantly in value over time. Office REITs beat some analysts' expectations in the first quarter.
Investors may want to consider Columbia Property Trust (CXP - Get Report) . The Atlanta-based company has announced two major deals in recent weeks. It owns and operates class A office buildings located in business-centric regions, including San Francisco, New York, Washington D.C. and Boston, among other markets. Its $5 billion portfolio includes 26 office building and a hotel.
Moreover, the company recently signed a 30-year lease in New York City with NYU Langone Medical Center for its entire 25-story office tower near the East River and a 10-year lease with the financial services firm Winston Capital Management for the top two floors of a building on ritzy Park Avenue South.
The company's CEO Nelson Mills called the Langone deal "very significant."
Columbia has leased 517,000 square feet of space this year and 98% of its Manhattan portfolio.
New York has been a particularly vibrant market and is likely to remain so, said Sandler O'Neill, a senior REIT analyst at Sandler O'Neill, said that New York may be particularly enticing. The city continues to see a building boom.
"Large institutional investors pay for New York, as they look at it more as a store of value," Goldfarb, said. "Growth is gravy. They're looking to park capital. Foreigners, high net worth, really look to New York. If any sector is going to be the biggest beneficiary, it's that."
Columbia's stock gained 0.04% in the last month and 5.55% in the previous three months. The REIT's shares were trading approximately 4.31% above their 50-day moving average and 1.59% above their 200-day moving average. Columbia's dividend yield is 5.62%.
Real estate trusts, particularly in the commercial industry, have outpaced equity markets for the better part of 2016. Despite Brexit and global, economic uncertainty, that's likely to continue