Blackstone: Real Estate Dealmaking Is Stirring Again After 2-Year Lull

After two years of a near freeze in transactions and falling values, Blackstone says commercial real estate dealmaking is showing signs of life as financing conditions ease.

Speaking on the firm’s fourth-quarter earnings call this week, Blackstone President Jonathan Gray said easing financing conditions are helping revive transaction activity after a prolonged period of valuation pressure and muted deal volume across commercial real estate.

Gray pointed to Blackstone’s exposure to data centers and real estate credit as anchors of that confidence.

“Our exposure to data centers continues to be a source of strength, as does real estate credit,” Gray said during the earnings call. “We remain highly optimistic about the direction of travel for our real estate business.”

Blackstone was the largest seller of industrial and multifamily assets in the U.S. last year, according to a Bisnow analysis of CoStar sales data, shedding $4.6B worth of industrial properties and $3.1B in apartments. 

Blackstone CEO Stephen Schwarzman said the firm overall posted the strongest quarterly results in its 40-year history, reporting $2.2B in distributable earnings for the fourth quarter, or $1.75 per share, well ahead of Wall Street expectations.

Revenue rose to $4.4B in the quarter, topping analysts’ expectations of about $3.6B.

For the year, Blackstone reported just over $3B in net income and grew assets under management 13% to nearly $1.3T, fueled in part by $43B raised in its private wealth business, a 53% year-over-year increase.

Schwarzman said the results came despite a volatile backdrop for global markets.

“We achieved these results amidst a turbulent year for markets, which was impacted by tariff uncertainty, geopolitical instability and the longest government shutdown in U.S. history,” he said. 

Blackstone has deployed more than $50B for real estate over the past two years, but a slow and uneven valuation recovery left its real estate funds with what Gray described as “limited appreciation” in 2025.

“U.S. private real estate values have been slowly improving. However … real estate values are still down 16%, compared to an increase of 75% for the S&P 500,” Gray said. “We think real estate has plenty of room to run.”

As valuations recover, Gray said Blackstone expects to step up acquisitions, pointing to a “sharp decline in construction starts” for multifamily and logistics properties.

Executives highlighted artificial intelligence as a key investment theme, with the firm planning to continue deploying capital into data centers and related infrastructure this year. Blackstone has nearly $200B in dry powder.

“The historic pace of investment taking place in the U.S. to facilitate the development of artificial intelligence, including the design and manufacture of semiconductors, data center construction and the expansion of power generation, is a key driver of economic growth today and is creating an enormous need for capital solutions,” Schwarzman said.

Blackstone has been weighing additional investments in an Oracle data center project in Michigan, including potential debt financing alongside equity, GuruFocus reported earlier this week.

Blackstone shares were down more than 3% on Thursday and are trading roughly 20% below their 52-week high.