Blackstone has announced a major leadership change in its real estate division. Kathleen McCarthy, the global co-head of real estate, will be leaving the investment firm at the end of the year after a 15-year tenure. Her departure will leave Nadeem Meghji as the sole global head of the influential division.
McCarthy, a key figure in the firm's significant expansion, confirmed her departure to pursue new opportunities. The transition marks a new chapter for Blackstone's real estate arm, which manages hundreds of billions in assets worldwide.
Key Takeaways
- Kathleen McCarthy, Global Co-Head of Real Estate at Blackstone, will leave the firm at the year's end.
- Nadeem Meghji, her current co-head, will become the sole global head of real estate.
- During her 15 years at Blackstone, McCarthy helped grow the real estate business's assets under management from $115 billion to $320 billion.
- Her leadership spanned a period of significant market shifts, including the pandemic and recent interest rate hikes.
A Leadership Transition
The announcement signals a significant shift within one of the world's largest real estate investment platforms. Nadeem Meghji, who was appointed co-head alongside McCarthy in 2024, will now lead the division independently. Meghji previously served as the head of real estate for North America.
The leadership structure had evolved previously. In 2018, McCarthy was elevated to global co-head alongside Ken Caplan. This move came as Jon Gray, the former real estate chief, became Blackstone's president. Caplan later transitioned to become Blackstone's global co-Chief Investment Officer, leading to Meghji's promotion.
In a public statement, McCarthy reflected on her time at the firm and the team's accomplishments.
"Leading Blackstone Real Estate has been one of the great privileges of my career — fun, challenging, and deeply rewarding. I’m so proud of what we’ve built together through an extraordinary period of growth and transformation."
A Legacy of Unprecedented Growth
McCarthy joined Blackstone 15 years ago from Goldman Sachs’ real estate investment business. Her tenure has been defined by remarkable expansion. She played a central role in steering the real estate business through a period of intense activity and market volatility.
Massive Expansion
Under McCarthy's leadership, Blackstone's real estate assets under management grew from $115 billion to $320 billion, nearly tripling in value and cementing the firm's dominant position in the sector.
This period of growth included the final years of a boom driven by low interest rates, followed by the unprecedented disruption of the coronavirus pandemic. More recently, she navigated the division through the market downturn that began in 2022 as central banks raised interest rates to combat inflation.
This challenging economic environment led to a rare event in Blackstone's history: a slight, temporary decline in its real estate assets under management.
Navigating Market Headwinds
The past few years have tested even the most seasoned real estate investors. Blackstone was not immune to the pressures of rising borrowing costs and shifting property valuations.
Calling the Bottom
In early 2024, Blackstone's leadership publicly stated their belief that the real estate market was bottoming out. In a March 2024 interview, McCarthy noted, “Because of our expectation on rates, we think that real estate values are bottoming out. But that doesn’t mean it will be a V-shaped recovery.”
This cautious optimism appears to be reflected in the firm's recent activity. In the first nine months of the year, Blackstone sold $16.9 billion in real estate. This figure is nearly identical to the $16.7 billion sold during the same period in the previous year, suggesting a steady, if not explosive, market.
The Path Forward
McCarthy’s next move will be closely monitored by the financial and real estate industries. It is not uncommon for top executives from major firms like Blackstone to launch their own ventures.
There is a growing list of Blackstone alumni who have started new enterprises. For example, Chad Pike, a former head of real estate at the firm, launched a new fund management business named Makarora in 2023. This trend highlights the deep pool of talent and entrepreneurial spirit cultivated within the company.
For Blackstone, the sole leadership of Nadeem Meghji will guide the real estate division as it continues to navigate a complex global market. The firm's strategy will be under scrutiny as it positions its vast portfolio for the next phase of the economic cycle.
