- Blackstone’s Q3 distributable earnings jumped 48% to $1.9B, beating analyst expectations thanks to strong investment exits and credit inflows.
- The firm sold $7.3B in real estate, contributing to $30B in total investment realizations during the quarter.
- Executives said the “deal dam is breaking” as lower borrowing costs improve market liquidity and fuel more transaction activity.
- Assets under management hit a record $1.24T, supported by $54.2B in new investor inflows and strength in private credit.
Strong Quarter Powered by Exits and Inflows
According to Bisnow, Blackstone’s third-quarter results beat expectations. The firm reported $1.9B in distributable earnings, or $1.52 per share — well above the forecasted $1.23. The increase was driven by a surge in investment sales and private credit inflows.
Real estate played a key role. Blackstone sold $7.3B in property during Q3, up from $5.25B in Q2. Major transactions included the $730M sale of Park Avenue Tower in Manhattan. Total investment realizations across asset classes reached $30B.
“The Deal Dam Is Breaking”
Executives are optimistic about market conditions. President Jon Gray said falling rates are improving liquidity, allowing more deals to move forward. The Fed cut interest rates for the first time this year in September. Economists expect two more cuts before January.
CEO Stephen Schwarzman called the declining cost of capital a “secular tailwind.” He added that better conditions should lead to stronger returns.
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CRE Rebound Gains Momentum
Blackstone believes commercial real estate is turning a corner. Gray noted the sector likely bottomed in late 2023. Since then, the firm’s flagship BREIT fund has delivered three straight quarters of positive returns. Share redemptions are also at their lowest in over three years.
Limited new construction in multifamily and logistics — areas where Blackstone is heavily invested — is expected to support long-term values. In addition, CMBS issuance is up 25% year-to-date, another sign of growing investor confidence.
Focus on Private Credit and Data Centers
Private credit remains a major growth area. The business pulled in $35.9B in Q3 inflows. However, lower rates could reduce yields. Even so, Gray said investors are still earning a premium over public credit markets.
Analysts also raised concerns about a potential data center bubble. But Gray pushed back, noting Blackstone signs long-term leases with investment-grade tenants. Demand for AI-driven infrastructure is rising quickly. The firm’s global leasing pipeline for data centers doubled from Q2.
Looking Ahead
Blackstone, now celebrating its 40th anniversary, is expanding its global footprint. It recently launched a TV ad campaign in Japan to attract private wealth investors.
With more rate cuts likely and market sentiment improving, the firm expects continued momentum across real estate, credit, and infrastructure.
“A number of tumblers are falling in place for real estate,” Gray said. “We’re getting closer to that inflection point.”
