Finance   ·   Earnings

Blackstone Reports Q3 Earnings of $1.9B

COO Jon Gray spoke to lucrative investments into data centers, logistics and housing, which is 75% of the firm’s global equity portfolio today

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The Blackstone machine continued its unrelenting push through trillion-dollar territory as 2025 closes in on its final months.  

Blackstone reported that its distributable earnings increased 50 percent year-over-year to $1.9 billion, largely on the heels of a 26 percent growth in fee-related earnings and a doubling of net realizations. The numbers were announced Thursday during a third-quarter earnings call. 

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The firm reported that it expects $1.6 billion to be distributed to shareholders during the third quarter of 2025, bringing the total up to $6.2 billion through dividends and share repurchases over the last 12 months. 

Additionally, Blackstone Chairman, CEO and co-founder Stephen Schwarzman, reported that capital in-flows reached $54 billion in the third quarter of 2025, the fourth consecutive quarter in which the firm brought in excess of $50 billion, for a total of $225 billion in the last 12 months. The firm’s assets under management now stands at a firm-record $1.24 trillion. 

“I believe our prospects for growth are stronger today than at any point in the firm’s history,” said Schwarzman. “More investors are being introduced to the benefits of private market solutions, growing adoption across private wealth and insurance channels.” 

Jonathan Gray, president and chief operating officer, reported that corporate and real estate credit crossed the $500 billion milestone in the third quarter and those holdings are now up 18 percent year-over-year, while Blackstone Real Estate Investment Trust the firm’s flagship real estate investment trust, generated $800 million in sales in the third quarter and reported its third consecutive quarter of positive performance. 

Gray specifically highlighted the commercial real estate sector in his brief remarks, and argued that investor sentiment in CRE is starting to improve and that Blackstone is a “firm believer in the sector’s recovery.” He noted that CRE values bottomed in Dec. 2023 and have slowly improved — for instance, transaction volumes are up 25 percent year-over-year in U.S. logistics. 

He also pointed to a decline in new construction starts as being positive for the firm’s investment positions.  

“In a market driven by supply and demand, the dramatic decline in new construction starts, including in U.S. logistics and apartments, our largest sectors in real estate, should be very positive for values over time,” said Gray. “As we stated before, we believe Blackstone is the best positioned firm in the world to benefit from the recovery underway in real estate markets.”

Michael Chae, chief financial officer for Blackstone, said the firm’s real estate platform “remains well positioned,” as values remain stable, with data centers, logistics, rental housing comprising 75 percent of the global equity portfolio and nearly 90 percent of BREIT’s portfolio. 

“Overall, our investors have continued to benefit tremendously from the firm’s position,” said Chae.

Gray also noted that Blackstone’s enormous data center investments have been driving the firm’s strong returns, with the vast majority of their investment returns emerging out of  the development and leasing data centers across the U.S., Europe and Asia. 

“The key to what we do from a risk standpoint, is we make sure we have an investment-grade counter party … with roughly $1 trillion to $4 trillion market caps, and we get lease terms of 15 to 20 years,” he said, noting the returns come from the difference of the cost of developing data centers and their worth as stabilized assets. “That’s when you start to deploy capital at a real scale.”

Gray noted that Blackstone saw its data center leasing metrics double from the second quarter of 2025 to the second quarter of 2025. 

“When you think about what’s happening with AI and the demand for compute [power], I think it’s a very good sector to be in,” he said. “The demand for data space continues to grow.” 

Gray also spoke to his belief that real estate volumes and activity bottomed in 2023 and 2024 and that the sector is on the point of experiencing a V-shaped recovery, with it being only a matter of time before investors recognize that even though the sector has long been out of favor, people will always need housing and use logistics centers. 

He noted that the cost of capital in late 2025 has come down meaningfully via interest rate declines, spreads have also retreated significantly, commercial mortgage-backed securities volumes are up 25 percent year-to-date, and that construction declines in new supply have set the stage for cash flow growth for owners like Blackstone.   

“I think we’re at a point here where the combination of a capital markets recovery, and a sharp downturn in new construction, sets the groundwork for getting close to that inflection point,” he said. “When you see that, it will be very helpful to our business given our exposure.” 

Brian Pascus can be reached at bpascus@commercialobserver.com