Central bankers have been warning of the potential negative effect that Britain's withdrawal from the EU will have on the world economy—but what about on real estate? Bisnow sat down with international real estate attorney Edward Mermelstein—who has over 20 years' experience representing highbrow clients—for his take on Brexit's impact on the NYC market.

Bisnow: Could Brexit be good news for the NYC luxury market, as one of London’s competitors?

Edward Mermelstein: Based on what’s been happening over the last year in Britain, any additional disruption in their markets will likely be good news for our markets. So the likelihood that NYC real estate will benefit from Brexit is very high.

Bisnow: Is it just NYC, then, or other markets around the country that will see a boost?

Edward Mermelstein: Well, there should be a benefit to the US markets as a whole. But with NYC being the most popular destination outside of London for foreign investment, the likelihood that NYC will be the primary beneficiary is understood just based on the competitive nature between the two cities.

Bisnow: What specifically about Brexit would make investors shy away from the London market?

Edward Mermelstein: We’re seeing quite a bit of chatter about the short-term effects on the British economy, with economists indicating that, more likely than not, there will be an impact on the British economy in the short term which may be somewhat significant. Their long-term outlook is less definitive, but in the short term we’re expecting Britain to see further economic slowdown, including an impact on the British property markets.

Bisnow: In which case investors would see US real estate as some sort of safe haven?

Edward Mermelstein: Correct.

Bisnow: Will investors from certain countries in particular be shifting their investments?

Edward Mermelstein: We’re currently seeing a flow shifting to the US out of the former USSR, as well as many of the Middle Eastern investors—who were very comfortable in the British market—are now shifting slowly to the states as well. More than a few of our Chinese clients in recent months have shifted their business offices from London to NYC. So the trend seems to indicate that even before the announcement of Brexit the shift has begun.

Bisnow: What about British investors? Do you see them pulling back towards the UK, or do they want to get their money out of the country also?

Edward Mermelstein: We’re not seeing UK investors shifting to the states in any significant numbers—although the experience has been that any time there is a local disruption it forces local investors to shift investments into safe havens, the US being one of them. We’re not necessarily seeing today a significant shift from Britain, but the expectation is that if Brexit does occur that will change.