Blackstone to Invest $13 Billion in Student Housing ProjectMay 18, 2022
The signs of the recession period have started to materialize in the United States as companies are announcing layoff sessions. However, regardless of the economic trials, Blackstone Inc. has decided to pour a massive amount of investment into the sector. The financial mogul has plans to join hands with ACC or American Campus Communities Inc. to make this transition possible.
Blackstone is the largest alternative investment and asset management company in the world. The deal that is officially finalized at $12.8 billion postulates the whole acquisition of ACC by Blackstone. According to the details of the merger contract, Blackstone will also acquire the rights of ACC’s debt shares. The asset manager is willing to pay a 13.7% higher premium, citing the $65.47 per share price of ACC.
Impact of Increasing Interest Rates on the Housing Market
Economist Ronnie Walker recently published a research paper on the upcoming market projections for the housing markets. The report suggests that with the Federal Reserve’s monetary policies, the mortgage rates can experience a sharp increase. Walker also claimed in his report that Housing prices could take a direct hit from the transition.
He also mentioned that the housing market is most susceptible to the changes in the interest rates and is used as a standard scale for measuring economic transitions. He clarified that the lack of demand and supply is likely to dampen the blow of inflation on housing rates for the season.
However, WSJ analyst Nick Timiraos opines that non-loan payment trends are decreasing the purchasing power of the average citizen. While economist Bill McBride retorted that Fed would be forced to inflate the interest rates further to break the resilient housing rates.
A recent report published in Reuters explained that Wall Street bond yields have managed to keep moving in the upward direction. The event is crucial at a time when the Federal Reserve is making preparations to keep the storm of inflation at bay, and the economic repercussions of Ukraine and the Russian war have started to show their detrimental economic impacts.
IMF recently downgraded the global growth forecast index by one percent this week. The investors are focused on the estimated earnings from share markets to assess the full extent of damages from the Ukrainian War and Russian financial sanctions. Dow Jones index gained 266.7 points, the S&P index improved by 0.67%, and NASDAQ printed a 0.5% green ticker. Meanwhile, bond yields reached the highest point in 2 years out of a 10-year performance period.