If there was one asset Blackstone regrets letting go, it was Manhattan's Worldwide Plaza, laments global head of real estate Jonathan Gray. (One night, you'll find him outside the building with a boombox over his head.)

The firm was so focused on selling assets after its $39B buyout of Equity Office Properties, which had owned the building, "that we let it get away," he told Newmark Grubb Knight Frank prez Jimmy Kuhn during a one-on-one Wednesday at NYU Schack Institute's 46th annual capital markets conference in Manhattan. Macklowe Properties bought as part of a portfolio, then its value fell again sharply. Blackstone's methodology, after all, is "buy it, fix it, sell it." Like its $9B rescue of Centro Properties two years ago; redubbed Brixmor Property Group, the retail giant underwent an IPO this week that raised $825M on its trading debut. Now we're just waiting for Hilton.

Jimmy and Jonathan before their sit down. Blackstone's other investment philosophy is not to make short-term moves and deliver poor returns, Jonathan says. (We used to buy only Baltic Ave in Monopoly before meeting Jonathan.) One area of focus: snapping up foreclosed, single-family homes and renting them--since prices have fallen as much as 50%, you can buy at a discount to replacement cost, and a lack of supply would support growth, he says. Blackstone believes it can take that national platform, Invitation Homes, public over time. Its $1B purchase of Duke Realty's suburban office portfolio has been a boon too, as no one is developing in those markets, allowing for steady improvement.