Blackstone Inc. reported on Thursday that its first-quarter distributable earnings tumbled 36% compared with the same quarter a year ago, chalking up the contraction to a weak commercial property market, while its credit and insurance funds did better.

Distributable earnings represent the cash available for paying dividends. During Q1, such earnings came in at $1.25B for Blackstone. A year earlier, they totaled $1.94B.

The sluggishness of CRE investment volumes has meant that Blackstone hasn't been able to sell assets for the same kind of pricing as only a year ago, though the company has benefited from its relatively light exposure to the troubled office sector, The Wall Street Journal reports.

“We made a huge pivot in our business,” away from U.S. traditional office assets and toward industrial, rental housing, data centers, life sciences and especially hotels, Blackstone Global co-Head of Real Estate Kathleen McCarthy told Bisnow early this week.

“Those sectors were 3% of our portfolio a dozen years ago, now they’re more than 80%,” she said. “We’ve got that right, and that has allowed us to perform in a choppy environment, but [it has] also given us so much data to go on the offensive now in those sectors where we shine the brightest.”

Even so, the investment giant has been coping with the fact that since November, its flagship REIT, Blackstone Real Estate Income Trust, has had to limit investor withdrawals, capping them at 5% of the quarterly net asset value of the entity each month as investors clamor to exit commercial real estate.

For the quarter, Blackstone also reported net income of $85.8M, or 11 cents per share, a sharp drop from $1.22B, or $1.66 a share, during Q1 2022.

Despite the broader economic turbulence, Blackstone has been able to increase its assets under management to $991.3B, an 8% jump from a year ago and not far from its previously stated goal of having $1T in assets under management by 2026. Blackstone also secured new investment funds.

“Our successful fundraising initiatives position us with nearly $200B of dry powder capital, an industry record, ahead of what we believe will be an attractive environment for deployment,” Blackstone Chairman and CEO Stephen Schwarzman said in a statement.