Blackstone Says Revenue, Income Up Due to Strong CRE Tailwinds

The private equity giant — now with $1.1 trillion in assets under management — poured $25 billion into commercial real estate in 2024

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The Blackstone train continues to power through the highest reaches of American finance, and it’s being fueled by commercial real estate.  

During a fourth-quarter earnings call Thursday, Stephen Schwarzman, Blackstone (BX)’s chairman and CEO, announced that his private equity juggernaut “just reported one of the best quarters in our history,” as income, revenue and distributable earnings all shattered comparables from 12 months earlier. 

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Blackstone reported net income of $5.4 billion in 2024, up from $2.4 billion in 2023. The firm ended the year strong with $1.3 billion in fourth-quarter net income, far exceeding the $109 million it reported to end the fourth quarter of 2023. 

The firm announced that total revenue hit $13 billion in 2024, up from $8 billion in 2023, as fourth-quarter revenues reached $3 billion, more than double the $1.2 billion revenue total from the same time the year before. Moreover, distributable earnings — profits delivered to shareholders —  reached $2.1 billion in the fourth quarter, up 56 percent from the $1.3 billion in the fourth quarter of 2023. 

As shareholders have reaped rewards, investors have clambered to jump aboard the Blackstone bus. 

“We raised $28 billion in private wealth in 2024, including $23 billion in the perpetual strategies, nearly double — let me repeat, nearly double — what we raised from individuals in these strategies in the prior year,” said Schwarzman. “All signs point to further acceleration in 2025.”  

Blackstone’s assets under management (AUM) now stand at $1.1 trillion, having crossed the $1 trillion threshold in July 2023.

Jonathan Gray, president and chief operating officer, called it “an outstanding quarter for Blackstone,” and noted that the firm deployed $134 billion in capital in 2024, an 81 percent increase year-over-year, with the firm investing a whopping $62 billion across its verticals in the fourth quarter alone, making it the firm’s most active quarter since mid-2022. 

“The combination of a healthy U.S, economy, historically tighter financing spreads, greater debt availability, the prospect of a more business-friendly regulatory climate, and accelerating technological innovation have given us confidence to deploy capital at scale,” said Gray. 

Gray cited the firm’s commercial real estate investment strategy as one of the key drivers for the strong rebound Blackstone experienced during the 2024 fiscal year. He listed deals such as the firm’s $4 billion privatization of Retail Opportunity Investment Corporation, a grocery real estate investment trust, and its $2.6 billion acquisition of a luxury, mixed-use complex in Tokyo, the largest real estate transaction in the country by a non-Japanese investor.

Blackstone reported $450 billion in total assets across corporate and real estate credit, with inflows exceeding $100 billion in 2024, comprising 60 percent of the firm’s total inflows. 

The firm’s non-investment-grade private credit and real estate credit drawdown strategies appreciated 16 percent and 18 percent, respectively in 2024. 

“These are extraordinary results for performing credit, underpinning robust investor interest in the areas,” said Gray. “We built a private credit juggernaut and the largest third-party business of its kind in the world.” 

BREIT — Blackstone’s private real estate investment trust — saw net repurchase requests decrease by 97 percent in 2024, and reported 9.5 percent net annual returns for its investors since its inception, according to Gray. 

However, both Schwarzman and Gray lamented the difficult capital markets conditions that Blackstone’s real estate strategy has had to navigate in recent quarters. 

The firm’s equity-oriented CRE funds saw returns decline in the fourth quarter 2024 — its opportunistic portfolio fell 5.1 percent, while its core-plus portfolio declined nearly 1 percent — which Gray blamed on an 80 basis point increase in the 10-Year Treasury yield and non-U.S. holdings getting hit by a stronger U.S. dollar. He said that he “would not expect” Treasury yields to jump by this magnitude going forward, due to the underlying inflation data his firm’s been privy to. 

“While disappointing in the near term, our portfolio is in excellent shape with cash flows growing solidly overall across virtually all our real estate strategies,” said Gray. 

Gray emphasized that Blackstone remains “firm believers that a sustained CRE recovery is underway,” and cited several metrics that paint a prettier picture of the industry as it opens 2024: Debt markets are healthier as borrowing spreads have tightened approximately 50 percent from their widest margins in 2023; CMBS issuance increased threefold in 2024, reflecting growing investor sentiment; new construction starts are now down in both U.S. logistics and U.S. multifamily, Blackstone’s largest sectors; and demand has proven resilient, according to Gray.

It’s not just words but dollars that underpin Blackstone’s conviction in a CRE rebound: The firm deployed $25 billion into the sector in 2024, up 70 percent from its 2023 investment levels.  

“Commercial real estate is a cyclical asset class that has been through a cyclical downtown,” said Gray. “We believe Blackstone is the best-positioned firm in the world to benefit from the recovery.”  

Schwarzman focused on the phenomenon of “disinflation” — a rapid decline in prices — during his brief remarks, noting that even as volatile U.S. Treasury yields have reflected persistent inflation concerns among investors, the new federal policies under a second Trump administration are likely to be “pro-growth and pro-deregulation.”

“With respect to inflation, what we see, based on our expansive portfolio, and our proprietary data, the U.S. is continuing in a path of disinflation, albeit at a more moderate pace than before,” said Schwarzman. “The power of Blackstone’s platform will continue to drive us forward. Our positioning has never been stronger, nor our prospects brighter.” 

Brian Pascus can be reached at bpascus@commercialobserver.com