- David Levine and Giovanni Cutaia now run Blackstone real estate after Nadeem Meghji announced his exit, with the unit’s profit tracking at half its 2022 peak and a $30 billion fundraise delayed.
- Nearly a third of the group’s senior managing directors have left in three years, as weaker fund returns shrank the carried interest that once paid senior dealmakers up to $15 million a year.
- Data center demand and AI-driven leasing offer relief, but rate-hobbled deal markets mean the new leaders must deploy capital before they can raise the next fund.
Blackstone has handed its real estate business to a new pair of leaders at a tough moment, according to a Bloomberg feature published Nov. 8.
David Levine and Giovanni Cutaia take over a unit whose profit is tracking at half its 2022 peak.
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A Shock Leadership Change
Nadeem Meghji became sole head in January and announced in September that he would leave by year-end, less than 10 months after co-head Kathleen McCarthy departed. Bloomberg reported that Jon Gray tried and failed to talk him out of it, citing colleagues.
A firm statement said Meghji plans to take time with his young family. People familiar with his thinking told Bloomberg he eventually wants to start his own venture.
A Broader Exodus
The top job is not the only one that has turned over. Nearly a third of the group’s senior managing directors have left in three years, according to the Wall Street Journal.
Two top real estate credit executives joined Starwood Capital, and the head of strategic investments in the Americas started his own firm. Former senior managing director Tyler Henritze has since raised $1.9B for the second fund at the firm he co-founded.
A Blackstone spokeswoman told the Journal the number of senior partners in the group is unchanged and pointed to 45 partners with an average tenure of 14 years.
The Numbers Behind the Slide
Blackstone’s latest results showed real estate distributable earnings down 10% from a year earlier and assets $30B below their peak. Opportunistic strategies lost 3.2% over the quarter, and private equity has overtaken real estate as the firm’s most profitable business.
The flagship BREP IX fund, which began investing in 2019, has returned 3% annualized net, according to Bloomberg. KKR’s comparable fund has returned 3.3%, Carlyle’s 1% and Brookfield’s 3%.
The Journal reported that the $20.5B 2019 fund was below the return hurdle for carry as of June, and that four of 13 funds with ended investment periods were under their thresholds in Blackstone’s 2025 annual report. By contrast, a fund that closed in 2012 with $13.3B has earned 14% annualized and generated about $3B of carry, per compensation experts the Journal cited.
The Pay Problem
Senior real estate executives typically earn about $2M a year in salary and regular bonus, according to recruiters and former executives cited by the Journal. In good years, carried interest added as much as $15M for a senior managing director, and more for a business head.
With fund returns weak, that upside has faded. Recruiter Darin White Eydenberg of Highridge Search told the Journal that many top dealmakers feel their opportunity has plateaued and want to prove they can build something themselves.
The Fundraising Clock
The unit manages about $309B, including nearly $47B of uninvested capital. The tenth flagship fund must deploy at least 70% of its $30B before Blackstone can pitch a successor, Bloomberg reported.
Levine and Cutaia see openings in warehouses, hotels and grocery-anchored retail, which have benefited from thin new development. They also see data center financing as a source of large deals.
AI Gives Some Relief
Gray said a June sale of three fully leased Northern Virginia data centers lifted real estate returns to a four-year high in the second quarter. Nearly 15% of Blackstone’s big warehouses are now used by hyperscalers for equipment storage, and second-quarter leasing volume rose 30% year over year, per Bloomberg.
AI tenants are also helping office and life science holdings, and Blackstone recently leased a 25-story San Francisco tower to Anthropic. We saw the same pivot when BREIT put $7B of sale proceeds into data centers, according to AltsWire.
The strength is uneven. In a February filing, Blackstone said data center gains in 2025 were partly offset by weaker fundamentals in life sciences office, student housing and select logistics.
Why It Matters
Levine said in an interview with Bloomberg that the firm will stay disciplined and will not rush if transactions are slow. Cutaia said capital markets still face rate volatility, though fundamentals are improving.
Property values have fallen since the Fed began hiking in early 2022, and many would-be sellers are waiting, so lower prices have not yet produced bargains. Blackstone is also running a secondary process for Blackstone Property Partners and has cut management fees for some investors who stayed.
Investors are watching closely. Greg MacKinnon of the Pension Real Estate Association told the Journal that limited partners have to be worried when this many executives leave a firm.
What’s Next
The midterms could test Blackstone’s AI conviction. Gray told Bloomberg TV the firm has high confidence in long-term contracts with hyperscalers, but Democrats won in part on voter worries about AI, and Sen. Elizabeth Warren is expected to chair the Senate Banking Committee. We covered how Democratic wins threaten the data center boom, with about half of proposed additions facing more scrutiny.
Rival Starwood, which hired the credit executives, has also leaned into AI-driven sectors, as we noted when it closed its $10.2B fund.
