- Blackstone’s commercial real estate assets under management (AUM) fell 3% year-over-year to $352B, though it still holds the largest portfolio globally.
- CRE investment activity declined 37% in Q2 2025, but the firm raised $7.2B in new fundraising — a 22% annual increase.
- Executives say the market is nearing a “tipping point,” as falling interest rates and limited new supply set the stage for recovery.
A Mixed Quarter for CRE
Blackstone’s real estate business contracted slightly in Q2, per Bisnow. The firm invested 37% less in commercial real estate compared to a year ago. Dispositions also declined by 5% year-over-year. However, CRE fundraising rose 22%, totaling $7.2B for the quarter — a sign of continued investor interest.
Confidence in a Rebound
President Jon Gray said CRE’s recovery is a matter of “when, not if.” He pointed to improving fundamentals, falling interest rates, and declining construction activity. CEO Stephen Schwarzman agreed, noting Blackstone called the bottom of the cycle 18 months ago and has been investing actively since.
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Strength in Diversification
Despite the pullback in real estate, Blackstone reported strong company-wide results. Net income reached $1.6B in Q2. Fee-related earnings jumped 31% year-over-year. The firm invested $33B across all platforms, with $6.2B allocated to CRE.
Sector Focus
Blackstone continues to prioritize logistics, data centers, and rental housing. These sectors now account for 75% of its global equity portfolio and 90% of its real estate credit holdings. Life sciences assets underperformed due to new supply and cautious tenant demand.
Why It Matters
High interest rates and limited deal flow have slowed the CRE market, but Blackstone sees a turning point ahead. Executives said recent federal legislation — the “One Big Beautiful Bill” — and expected Fed rate cuts are improving investor confidence.
What’s Next
Blackstone is preparing for an eventual market rebound. With $352B in real estate AUM and strong capital inflows, the firm is positioned to take advantage of the next CRE cycle. If rates fall and clarity returns, deal volume is expected to pick up.
