Blackstone’s Real Estate Co-Head Reveals How It Will Spend New $30B Fund

Blackstone has just raised the biggest real estate fund in history. But amid the most volatile market in a generation, the big question is just how and when the world’s largest alternative asset manager will spend $30B of equity.

Blackstone Global co-Head of Real Estate Kathleen McCarthy told Bisnow where the new fund will be putting its money, and even more interestingly, where it won’t be following the final close of Blackstone Real Estate Partners X — the largest fund ever raised, not only in real estate but in private equity writ large.

She also explained why the current volatility is different to the post-Lehman crisis, but will still offer up great deals, outlining how the company will structure its giant portfolio to avoid becoming prey rather than predator when the market does turn.


Courtesy of Blackstone

Blackstone’s Kathleen McCarthy

“We made a huge pivot in our business,” away from US traditional office assets, toward industrial, rental housing, data centers and life sciences, with hotels holding a place in the firm’s heart, McCarthy said.

“Those sectors were 3{b5e4caabb46945dac267f6fa1789e0b2b1831cce91f79b27f72a0de22e4bb018} of our portfolio a dozen years ago, now they’re more than 80{b5e4caabb46945dac267f6fa1789e0b2b1831cce91f79b27f72a0de22e4bb018}. We’ve got that right, and that has allowed us to perform in a choppy environment, but [it has] also given us so much data to go on the offensive now in those sectors where we shine the brightest.”

Blackstone is a bellwether for the industry as the manager with the largest portfolio in real estate — $326B at the end of 2022. It got there by making large profits on huge deals during and after the 2008 financial crisis, so how it spends its latest opportunity fund in the most significant period of disruption since then will be closely watched by the market.

McCarthy told Bisnow where the new fund will be putting its money and where it will hold it back, namely traditional offices, and why the current volatility is different from the post-Lehman Brothers crisis, but will still offer up enticing deals.

“We’re starting to see interesting opportunities where you have willing sellers, what I’d call motivated sellers,” McCarthy said.

“Real estate is being painted with a pretty broad brush as if everything is the same, but the sectors we’re focusing on are actually in good shape. We’re starting to see deals where the assets themselves tend to be high-quality, we can build conviction around them. But the seller needs liquidity, and these are the most salable assets in their portfolio.”

Blackstone has been sitting on $24B of its $30B haul since the middle of last year. As of the end of 2022, it had only spent $674M of that, its annual report showed. Like everyone else in the market, the company has been waiting for the shrinkage of the gap between what sellers think an asset was worth yesterday and what buyers think it will be worth tomorrow.

That moment is coming, McCarthy said, as owners increasingly need capital to complete business plans and developments, or to

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How to Negotiate Price Down by Six Figures

  • Ryan Rogers says home buyers can take advantage of the current real estate market.
  • High interest rates have impacted home prices, allowing buyers more negotiating room.
  • Rogers recommends looking for properties that have been on the market for more than 30 days.

US mortgage rates have been on a gradual downtrend since early March, hitting an eight-week low on Monday. The 30-year fixed rate averaged about 6.62{b5e4caabb46945dac267f6fa1789e0b2b1831cce91f79b27f72a0de22e4bb018} on Wednesday, down from peaks of above 7{b5e4caabb46945dac267f6fa1789e0b2b1831cce91f79b27f72a0de22e4bb018} during the last quarter of 2022.

With rates still relatively elevated, many would-be home buyers believe that they’re at a disadvantage. But nothing could be farther from the truth, according to Ryan Rogers, a 23-year residential real estate agent with Douglas Elliman in Austin, Texas.

It’s sellers who are taking the hits, he said. Specifically, those who haven’t adjusted to the new normal and still hold unrealistic expectations for what they think their home is valued at. Since the start of the year, he has noticed an increase of properties that have been sitting on the market for 30 to 60 days. This made it easier to negotiate a better deal, he added.

“We’re seeing a lot of repricing and when you look at what’s currently on the market and what’s sold in the last 30 to 60 days in a specific neighborhood, most of the time, I’m noticing in our specific market, probably somewhere between six to as high as a 10{b5e4caabb46945dac267f6fa1789e0b2b1831cce91f79b27f72a0de22e4bb018} sale-price reduction from the price which they started to the price in which it closed,” Rogers said.

For example, a single-family three-bedroom, two-bathroom home in Austin, Texas had been on the market for about 90 days after it was initially listed for $779,000. The seller eventually reduced it to $725,000, Rogers said. But that was still too high. By the time he closed at home for his clients in January 2023, it had sold for $650,000, a $129,000 difference, he noted.

The number-one factor that made this steep price drop possible was that it had been on the market for three months, he said. The second factor was that they made an all-cash offer which could be closed quickly. Finally, he had to educate the listing agent on why the price was too high relative to the neighborhood comps, something Rogers says he has been doing a lot more recently.

He added that he’s going as far as requesting additional items like furniture. If it’s a waterfront property, he’ll request the boat docks and other recreational items, which wasn’t possible only a few months ago, he noted.

Taking the advantages

As early as seven to eight months ago, buyers were bidding 10 to 15{b5e4caabb46945dac267f6fa1789e0b2b1831cce91f79b27f72a0de22e4bb018} above the ask to secure a property, he noted. For example, a list price of $500,000 would be sold for $575,000. Today, that same house could be going for $490,000 or 480,000. So yes, the interest rate is going to be higher, but when you look at the payment difference, it’s not a huge delta, he added.


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Real-Estate Agents Face a Reckoning As Housing Market, Home Sales Slow

When Chrystina Arnold closed her first sale as a real-estate agent in December, she hoped it would provide a springboard to more deals and the start of a promising career. But almost four months later, Arnold is still trying to close a second sale.

Arnold, who lives in Port Huron, Michigan, paid $89 in October 2021 for a self-paced online course to become a real-estate agent. But by the time she got her license, in June, the typical mortgage rate had nearly doubled, leading to a dramatic slowdown in buying activity.

That drop-off has made the past year a struggle, Arnold told me. The first service she enlisted to help her find clients scammed her out of $600, and that December deal didn’t provide the financial windfall she needed. Even though Arnold represented both the buyer and the seller, the $57,000 sale netted her only a $2,300 commission — hardly enough to cover the various fees she pays to her brokerage, the National Association of Realtors, the company that sends her leads, and the multiple-listing service, a database where she can see homes for sale in her area. She’s occasionally worked at a bar or delivered pizzas to supplement her fiancé’s income and support her 6-year-old son. Despite the setbacks, she’s not giving up hope yet.

“I love my job. I love the flexibility of it,” Arnold told me. “The only thing I don’t like is the financial insecurity that comes with it.” 

Though she remains optimistic, Arnold knows the odds are not in her favor — agents with less than two years of experience earned a median gross income of just $8,800 in 2021, research from the National Association of Realtors found. But daunting statistics like that didn’t stop a wave of hopeful dealmakers from testing the waters earlier in the pandemic, when booming home prices promised hefty commission checks. The number of Realtors grew by more than 156,000 in the combined years of 2020 and 2021, according to the NAR, and peaked at a record high of 1.6 million in October. 

As the pandemic’s homebuying craze now seems like a distant memory, the slowdown in sales has forced a reckoning among real-estate agents who must decide whether the shrinking returns are worth the thousands of dollars and countless hours they’re pouring into their businesses. The challenges are most pronounced for newer agents who are still building up their networks, face fierce competition from their veteran counterparts, and haven’t yet weathered a downturn such as this one.

The spring homebuying season, when sales typically pick up and continue rising through the peak summer months, will be a crucial test for agents of all experience levels. A rising tide is no longer lifting all boats, and the industry is bracing to find out who’s in it for the long haul.

‘A low barrier to entry but a high barrier to success’

Jessica Reinhardt has seen this before. 

A second-generation Realtor, she’s watched plenty of people come and go from the

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EnviroProjects Named SBA’s Maryland Home-Based Business Of The Year

EnviroProjects LLC in Severna Park has been named the 2023 Maryland Home Based Business of the Year, by Stephen D. Umberger, district director of the US Small Business Administration’s Baltimore District Office.

Aaron Keel, principal of EnviroProjects, along with 13 additional award winners from Maryland, will be honored at the 37th annual Maryland Small Business Week Awards Luncheon on June 8 at Martin’s West in Woodlawn, Maryland.

The company assists clients with advanced environmental compliance needs through strategic, cost-effective, accurate and productive solutions. Since 2009, EnviroProjects has specialized in providing natural resource services and regulatory and cultural services while conducting due diligence and contamination assessments. Keel has more than 25 years of experience working with both private development and public infrastructure projects throughout the mid-Atlantic region. He is a member of numerous environmental and civic organizations, most recently serving as chair of the Urban Land Institute (ULI) Baltimore District Regionalism Committee, and volunteers with local restoration efforts of the Severn Riverkeeper and Patuxent Riverkeeper organizations.

Each year since 1963, the president has issued a proclamation calling for the celebration of National Small Business Week. This year, the dates are May 1-5, with national events planned virtually and in select cities across the country.

For information on the 2023 Maryland Small Business Week Awards Luncheon or for tickets, visit or contact

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Priced Out of House and Home

The News: The Wisconsin Institute for Law & Liberty (WILL) issued a new policy report, Priced Out of House and Home: How Laws and Regulations Add to Housing Prices in Wisconsin. The report examines the ways in which government regulation has contributed to the rising cost of home prices in Wisconsin. The report makes recommendations for both state and local policy makers to remove barriers to the development of more affordable market-rate housing.

The Quote: WILL Policy Director, Kyle Koenen, said, “Arbitrary government regulations that restrict property rights and depress the supply of affordable, market-rate housing options are pricing more and more families out of their version of the American dream. Policymakers at all levels of government should work to remove unnecessary barriers that contribute to the growing costs of homes nationwide.”

backgrounds: Over the past few years, the rising cost of housing has been a growing concern among Americans, particularly those looking to purchase their first home. Fewer Americans believe that now is a good time to buy a home than those who believed this during the Great Recession. Furthermore, a record low number of Americans believe they are ever going to own a home. Historically, low levels of housing inventory suggest that the lack of supply plays a key role in the shortage of affordable market-rate housing options. In a nation where home ownership has historically been one of the primary means of wealth creation for lower- and middle-class families, the increase of people being crowded out of the housing market has the potential to obstruct upward mobility in the long-run.

This tight supply can be attributed to a number of factors, including the inflation of construction materials and a lack of qualified labour. However, for developers who prepare land for housing and builders who build the homes, government regulations from the local, state and federal level make it more difficult and expensive to develop affordable-market rate housing.

Key Findings:

  • The government adds approximately $88,500 to the average cost of each new-built home in the Midwest. Based on national data on the cost of regulation, and regional data on the cost of new homes, this figure represents more than a quarter of the cost of the average new home.
  • The regulatory hoops before new construction can begin are extensive. A survey of Wisconsin builders found that the average development takes 14 months to even begin construction. Much of this is due to a tangled web of regulations where development can be stopped at every term.
  • Hyper-local control obstructs affordable market-rate housing and the exercise of property rights. National research shows that most people are supportive of the development of affordable housing, so long as it’s not in their backyard. The more opportunities for community input on a particular project, the less likely it is that the project will reach completion.
  • “Pro-environment” policies often worsen sprawl and pollution. Requirements for extensive green space in a development sound good on paper, but limit the density of new
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