There has been rumbling around the media space recently that the US real estate market might be headed for trouble. That view got a big affirmation yesterday when Blackstone, a major private equity firm, warned investors that real estate’s “great run” of the last five years is coming to an end. The firm says returns are going to be lower in the five years to come and that investors need to “calibrate” their expectations. The firm has recently cashed out of a good deal of real estate.
FINSUM: The fact that they are cashing out of real estate holdings shows that they are getting more pessimistic after the big gains of the last few years. We expect a slowing of the luxury market (both residential and retail) but strength at the bottom end of residential.