Blackstone is Betting on a Real Estate Comeback
The alternative investment giant may be on the verge of its first New York office building transaction in nearly three years.

Sign up for smart news, insights, and analysis on the biggest financial stories of the day.
The commercial property market has resembled a subplot in a Michael Bay disaster movie, but has the next act begun?
Blackstone sure seems to think so. “Office [real estate] has bottomed, particularly in stronger markets and better-quality buildings,” Blackstone President Jon Gray said in an interview with Bloomberg on Thursday, ahead of both the company’s earnings call as well as a possible major real estate deal.
Skyscraping By
As it turns out, rock bottom may actually be behind us. According to a report published by broker Colliers International Group earlier this month, the office space vacancy rate in New York City at the end of 2024 was around 16.5%. That’s about double from pre-pandemic norms but marks the lowest point from September 2022’s peak.
Valuations, meanwhile, are down as much as 70% from their pre-covid peak — which is why Gray said he expects a rebound, and likely why Blackstone is seizing the opportunity to get back into the market:
- The firm is nearing a deal to acquire 1345 Avenue of the Americas in Midtown, sources told Bloomberg. The building is 50 stories tall, spanning 1.9 million square feet.
- While details of the building’s price are not clear, S&P Global in November appraised the value of the loans secured against the building at $896 million. That’s down from $1.2 billion when the loans were first issued, though rent per square foot for top NYC buildings is now above pre-pandemic levels, according to real estate services firm Savills.
Sign of the Times: If completed, the deal would mark Blackstone’s first New York office building transaction in nearly three years. The office sector was once core to its real estate business — accounting for over 50% of its property holdings way back before the 2008 financial crisis. These days, office space accounts for roughly 2% of its portfolio, with warehouses, apartments, and data centers making up the bulk of its holdings.