“Office Has Bottomed”: Blackstone President Jon Gray
The global office market has bottomed out, particularly in stronger markets, said Jon Gray, president of Blackstone, the largest commercial real estate owner. U.S. office valuations, which declined 50% to 70% from their peak, are now positioned for a rebound.
The commercial real estate business (DCRE, DESK) reported a surge in profit following the post-COVID-19 pandemic slump, driven by the decline of the work-from-home era and a rebound in office space demand.
Now, “we would be willing to buy properties out there,” Gray said in a Bloomberg interview before the firm reported its fourth quarter earnings. “Office has bottomed, particularly in stronger markets and better-quality buildings.”
Blackstone’s traditional U.S. office holdings now make up less than 2% of its real estate portfolio, a sharp decline from over 50% before the 2008 financial crisis, as the firm has strategically retreated from the office market over the years.
Gray stated that Blackstone is now reassessing investments in office properties and is close to finalizing a deal to purchase a Midtown Manhattan tower.