Blackstone Sees Recovery Taking Shape as CRE Fundraising Climbs Article originally posted on Globe St. on July 29, 2025 After calling the bottom of the real estate cycle 18 months ago, Blackstone is now seeing signs of brighter days ahead. “And since then, we’ve been actively investing across our real estate equity and debt strategies,” said Stephen Schwarzman, chairman and CEO, during Blackstone’s second-quarter 2025 earnings call, according to a transcript from S&P Global Market Intelligence. He emphasized that the company never expected a rapid, V-shaped recovery. “Private real estate markets have appreciated gradually over this period,” Schwarzman added. Blackstone’s fundraising efforts reflect renewed confidence in the asset class. The firm reported real estate inflows of $7.22 billion in the second quarter of 2025, up from $6.18 billion in the previous quarter. According to Blackstone, the Q2 inflows consisted of $383 million in opportunistic funds, $4.48 billion in core plus and $2.36 billion in debt strategies, signaling a growing investor preference for core plus funds even as both opportunistic and debt strategies showed slower growth. The prior quarter saw $1.71 billion in opportunistic, $3.36 billion in core plus and $1.11 billion in debt strategies. Capital deployment remained robust with Blackstone investing $6.16 billion and reporting realizations of $5.25 billion during the quarter. Even after this activity, the company held $55.2 billion in real estate dry powder at the quarter’s end. Schwarzman outlined key factors supporting the recovery, noting, “We’re seeing promising signs with new supply falling sharply, the cost of debt capital coming down and transaction activity picking up.” He acknowledged ongoing economic uncertainties—including tariffs, fluctuations in Treasury yields, and market volatility—but pointed to “multiple supportive tailwinds for our business.” According to him, inflation remains muted, and any uptick in goods prices is likely to be offset by softening in wage, energy and shelter costs, potentially paving the way for the Federal Reserve to lower interest rates. Blackstone President and Chief Operating Officer Jonathan Gray echoed this cautious optimism, saying, “The good news now is it’s all about a question of when, not if, because the building blocks for this recovery are clearly coming into place.” He noted that new multifamily and institutional construction is finally slowing, which is helping to rebalance the supply-demand dynamic. Gray also emphasized “early green shoots” of a faster recovery as the Fed begins to cut rates, and pointed out that transaction activity in smaller multifamily and logistics sectors has already picked up. Demand from clients also appears to be recovering. “There’s definitely now more openness to allocating to the space,” Gray said, noting increased conversations with potential investors and a recent capital raise of a couple of billion dollars for a dedicated core plus real estate industrial strategy. He further highlighted that Blackstone’s BREIT experienced its best regular fundraising quarter in several years.