Highlight of the Week
Annual Inflation Cooled Slightly in January as Pace of Moderation Levels Off
- In January, the inflation rate cooled slightly to 6.4% from 6.5% in December of last year
- Analysts note that the trend of cooling inflation has tapered as the reported inflation rate was higher than expected
- The Fed will likely remain on track to raise rates at their meeting in March as a result
- The inflation numbers show that while interest rate-sensitive segments of the market such as housing have cooled, other segments remain strong due in part to wage growth and a low unemployment rate
Fidelity National Information Services (FIS) Worldpay Spinoff
- FIS reported Q4 earnings on Feb 13th and beat consensus EPS and sales estimates. Their stock, which was up over 11% on the year, dropped 13% on Monday.
- The biggest news out of the earnings call was a “non-cash goodwill impairment charge” of $17.6 billion that was tied to its $43 billion acquisition of Worldpay in 2019.
- The company announced it plans to spin off its merchant business into Worldpay over the next 12 months amid a management change and a strategic shift in the core business outlook.
Blackstone Atlanta Multifamily Real Estate Acquisition
- Blackstone acquired Ellington Midtown, a 473-unit multifamily building, for $133 million. The price point per unit of $281,000 comes with a verbal commitment from Blackstone to pour several million more dollars into renovating the building’s amenities and common areas.
- While transaction activity has remained low as of late, this acquisition comes as the Conti Index has ranked Atlanta as the No. 2 market for multifamily real estate investment for 2023.
- The proximity of Ellington Midtown to Georgia Tech has been cited as a major motivating factor for the deal as Atlanta has seen companies like Google, Apple, and Microsoft develop offices to recruit top talent from the University.
- The deal with Goldman Sachs Asset Management signals a doubling down from Blackstone after last year’s announcement that their Real Estate Income Trust (BREIT) had acquired over seven housing properties in the Atlanta area.