Spain goes to the polls that weekend and the Brexit vote will potentially affect that outcome as there is a strong movement in Spain to do the same. This Brexit vote is not one and done. It is possibly the start of demands from others to reset agreements even if the UK stays. What is certain is that the EU is now at high risk of disruption and disagreements and that will not be helpful to recovery in Europe and may derail it no matter what the vote is.

I believe that while things will be messy, US CRE is a much better place to be right now than anything in the EU. Financial markets will stabilize there if it is stay, but the disruptions over the next couple of years are going to happen and the outcome is unable to be discerned. Investing in illiquid assets in Europe is too high risk. There may be an even greater flow of investment capital to the US no matter what the vote and surely if it is leave. That will be good for US CRE. With it now clear rates are not going up for a long time, and maybe by not much for several years, the period after this may be good for CRE. Unless the vote unsettles the markets such that the US economy slides into stall.

It is still impossible to know which way Brexit will go, but whichever it is there will be consequences, and none are good. If there is a leave win, then it will take as much as 3 years to implement as there are all sorts of agreements covering all sorts of subjects, from labor, to immigration to environment and many others. Redoing all of these will be made harder as the EU will stupidly try to punish the UK for voting to leave in the attempt to discourage others like Spain from following. That is a self- defeating and counter-productive policy to follow as the UK is a huge trading partner and any effort to punish the UK will be met with the UK firing back. Europe is the big loser in that fight although there would be a lot of damage to the UK as well. The UK has the giant advantage that it never gave up the pound, so it is far more independent than any other European nation, If the vote is sty then many members of the Conservative party will push Cameron to better his deal with the EU, and he may be forced to resign. Whatever happens there will be some level of turmoil. How serious is hard to know and for how long is impossible to say.

What is clear is the Euro and pound both suffer if the vote is leave. All the funds with Euro based assets will be hurt. Selling those assets will be almost impossible for years. It will mean there will not be European capital to invest here after next week for quite awhile. That capital is here already, and after a leave vote it will be financially impossible to afford. PE funds with large investments in Europe will be badly hurt if the vote is leave. There will also be a lack of liquidity for awhile as the European banks will suffer losses. Leave is the ultimate black swan event. Spain, Italy, Netherlands and Denmark will all want out. Merkel is now much weaker than in Grexit and will not be able to force consensus like she did then. She is so weak that she may lose the next election over refugees and Brexit.

Even if the vote is stay, Cameron will have serious problems. A big group of Conservatives are pushing for a tougher agreement than what Cameron has worked out. They will demand he negotiate it again. He could find himself having to call new elections as things play out. The EU will not give him an inch as they do not want others to think they also can renegotiate their agreements.

Spain goes to the polls that weekend and the Brexit vote will potentially affect that outcome as there is a strong movement in Spain to do the same. This Brexit vote is not one and done. It is possibly the start of demands from others to reset agreements even if the UK stays. What is certain is that the EU is now at high risk of disruption and disagreements and that will not be helpful to recovery in Europe and may derail it no matter what the vote is.

I believe that while things will be messy, US CRE is a much better place to be right now than anything in the EU. Financial markets will stabilize there if it is stay, but the disruptions over the next couple of years are going to happen and the outcome is unable to be discerned. Investing in illiquid assets in Europe is too high risk. There may be an even greater flow of investment capital to the US no matter what the vote and surely if it is leave. That will be good for US CRE. With it now clear rates are not going up for a long time, and maybe by not much for several years, the period after this may be good for CRE. Unless the vote unsettles the markets such that the US economy slides into stall.