In the Real Estate asset class, residential real estate is regarded as the most valuable and accessible. This has encouraged institutional investors to drive a lot of capital into funds that focus on these investments. Consequently, valuations have raised, whilst yields have fallen.
Thanks to a higher inflation and, subsequently, higher mortgage rates, large real estate investment companies continue to buy residential homes. This demand for real estate investments is evidenced by Blackstone closing in on potentially the biggest traditional private-equity real estate investment fund in history.
When combining Blackstone’s real estate funds in Asia and Europe, as well as $24.1 billion of commitments towards their fund called Blackstone Real Estate Partners X, the company will have over $50 billion available in opportunistic investments.
With a potential market downfall looming, Private Equity firms across the market have significant capital available to deploy and could pick up some attractive real estate bargains.