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​HFF Research Update for February 22, 2016: Mind the Map

Monday, February 22, 2016

Weekly insights on current research in the commercial real estate industry from HFF Managing Director of Research Jimmy Hinton. View Daily Rates on the HFF website or access the HFF Daily Rates App in iTunes.

At 10:30 a.m. EST, British Prime Minister David Cameron entered the chambers of Parliament in Westminster to address the House of Commons. On the docket will be concessions the European Union (EU) has offered Cameron to entice the United Kingdom to remain in that body. Expect a colorful exchange.

Analysis of Market Insights and Economic Performance

Cameron's success in attaining concessions should be enough to garner support for inclusion in the EU from fence-sitting Tory members of Parliament and moderately-conservative British citizens. Not so fast? Cameron's hopes took a studs-up tackle at the weekend when London Mayor Boris Johnson declared he would back pro-Brexit efforts.

Currency markets have responded with a heavy dose of irony. The British pound, itself an embodiment of Britain's preferential treatment apart from continental Europe, is down to US$1.40 to the pound, extending a protracted decline from a previously-sticky US$1.50.

The diminution in currency value is a not-so-subtle hint at the pain Britain will face (indeed, is already facing) if it unravels its partnership with the EU. Meanwhile, major companies are weighing in, including HSBC – who Boris Johnson just finished securing massive incentives to remain headquartered in London – which announced plans to relocate finance jobs to Paris under a Brexit scenario.

Sustained volatility in currency markets will impact the U.S. dollar, which will impact benchmark interest rates, which in turn can impact borrowing costs and values.

The world can be pretty flat. Events overseas can impact us. Keep your head up.

About Jimmy Hinton

HFF Jimmy HintonMr. Hinton serves as Managing Director of Research for HFF and is responsible for the firm’s research efforts. Mr. Hinton works with the executive management team to assist in investor relations and to inform both HFF staff and firm clients with in-depth analysis of economic, property and capital market trends. He is also responsible for providing extensive market reports, client presentations and deal-specific analysis for debt placement and investment sales assignments. Mr. Hinton’s responsibilities include substantial interaction with pension funds, life insurance companies, regional and CMBS lenders, REITs, foreign investors and private equity funds.

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