The world’s largest real estate owner is bracing itself for a slowdown in returns, warning investors to dial back their expectations.

The industry has been experiencing a record run of rising valuations for roughly eight years, but Blackstone Group said those returns are becoming difficult to sustain, and the private equity fund is not alone. Singapore’s sovereign wealth fund, GIC Pte, said bloated property prices are limiting returns on the sale of assets that have gained in value, Bloomberg reports.

Blackstone’s real estate portfolio is worth roughly $102B following its Q1 selling spree. To capitalize on high property values, the private equity fund sold $6.7B worth of real estate last quarter, including the sale of its 25% stake in Hilton Worldwide Holdings to China’s HNA Group for $6.5B.

Peaking Prices?

Talk of commercial real estate reaching its peak has been circling among CRE players and regulators as markets overheat, particularly multifamily. Even Federal Reserve officials worry inflated prices and overbuilt sectors will lead to the next asset-price bubble.

But economists remain optimistic. Reis economist Victor Calanog said in March the industry still has room to grow, especially if the economy continues to expand. Rent growth in office and multifamily may be decelerating in major markets, with apartment landlords in New York and San Francisco offering concessions to fill units, but that will not result in any burst bubbles.

“Less rent growth — does that mean we’ve peaked and are entering a place where rents will fall? I don’t think so. It’s not on a national level,” Calanog said at the time. “The problem with forecasting peaks or a top of the bubble is eventually you’ll be right … but if you’re right two years [early] then you didn’t make as much money.”