Blackstone Group has adjusted the valuations of several property assets amid rising interest rates and increased geopolitical uncertainty, the firm’s president Jon Gray said. The world’s largest private capital investment firm, with $1.4 trillion in assets, has also postponed some planned public offerings of its portfolio companies as market conditions have become more volatile.

Gray noted that Blackstone has marked down slower-growing real estate holdings, including extensive portfolios of multifamily homes in the United States and assorted properties across Europe, to reflect recent increases in interest rates. These adjustments correspond to higher capitalization rates and broader shifts in the real estate investment climate. Despite launching five initial public offerings (IPOs) this year, the firm has encountered setbacks, delaying several anticipated listings.

Earlier this year, Gray expressed optimism about having one of the largest IPO pipelines in Blackstone’s history. However, this outlook has since tempered. For example, AirTrunk, an Asian data center operator backed by Blackstone, pushed its public offering to next year, while Firmus, another Blackstone-supported company, withdrew from a highly anticipated Australian stock market debut.

“Near term it’s a little slower on the realization front, but that will normalize at some point,” Gray said, attributing some delays to geopolitical volatility. He indicated confidence that market conditions would eventually improve.

Blackstone’s third-quarter financial results aligned broadly with analysts’ forecasts but highlighted a slowdown in profits derived from asset sales. The company reported distributable earnings of $1.32 per share, a key cash flow metric, while fee earnings came in slightly below expectations at $1.26 per share. The tougher investment environment has prompted analysts to reduce earnings estimates for private capital firms, with shares in Blackstone and its peers declining roughly 30 percent year to date.

The firm’s real estate division recorded the weakest performance, with property fund values for institutional investors marked down by 3.2 percent during the quarter. In contrast, Blackstone’s core perpetual funds, which are often sold to retail investors, experienced a 1.6 percent increase in value. Notably, the flagship real estate fund for retail investors, Blackstone Real Estate Income Trust (BREIT), has delivered a 7 percent net return so far this year.

While property assets have faced challenges amid rising interest rates that began in 2021, Blackstone has significantly increased investments in data centers and warehouses. These sectors continue to demonstrate strong performance, helping balance pressures in the broader real estate portfolio.