Kathleen McCarthy, Global Co-Head of Blackstone Real Estate, asserts that the global real estate cycle has decisively "lifted off the bottom", providing an attractive environment for strategic investment centered on major demographic and technological tailwinds. Speaking at the Invest For Kids 2025 conference during the "Fireside Chat: Real Estate & Infrastructure" panel, McCarthy - whose firm manages approximately $600 billion in real estate on behalf of institutional investors, including the State of Illinois’ Teachers’ Retirement System - detailed a thematic strategy focused on sectors benefiting from overwhelming demand while maintaining discipline in distressed asset classes. The core thesis is that a resilient macro economy, coupled with stabilizing capital markets and robust cash flow growth in favored sectors, signals a compelling entry point for long-term allocators.
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Macro Reversion Supports Real Estate Recovery
Blackstone’s outlook on the macro environment is characterized by optimism regarding economic resilience and the containment of inflationary pressures. McCarthy noted that data across Blackstone’s diverse portfolio, which includes 250 companies managed through private equity, indicates that "inflation is very much under control and is supportive of an environment where the Fed will have the conditions it needs to really continue bringing rates down". This stability is viewed as "very favorable" for real estate, which has lagged credit and public equity markets but is only "five or 6% from kind of the low point".
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