$: "Put Me In Coach!"

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Brad Cartier & The Nest
July 15, 2025 • Estimated Reading Time: 5 minutes

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Private-equity giants are currently sitting on more cash than a Labrador left alone with an open fridge door, and they’re finally getting hungry. With $350 billion-plus in “dry powder” burning a hole in their bespoke pockets, dealmakers say the second half of 2025 could turn into a real-estate shopping spree. Buckle up: when Blackstone raids the clearance rack, everyone notices.

PE’S DRY POWDER KEG

Story: After two years of rate-shock paralysis, private-equity capital stacks have swollen to record size: Preqin counts $350 billion earmarked for North American CRE alone, with Blackstone leading the pack at $177 billion globally and $18.5 billion in its flagship BREP X fund. Early-2025 deal flow teased what’s possible (Blackstone’s $4 billion retail play; Apollo’s $1.5 billion Bridge buy), but tariff jitters and rate angst slowed Q2. Now, PwC, Bain & Co., and a chorus of brokers argue that valuations look ripe, new construction is scarce, and deployment deadlines are looming, so the cash cannons may finally fire.

So What? For owners, this means that multiple bids (and possibly actual bidding wars) could reappear on high-quality commercial assets, especially in “alternative” darlings such as data centers, student housing, and healthcare. Cap-rate compression is likely where dry powder is deepest, while distressed sellers who’ve been clinging to 2021 pricing may discover an exit at a smaller haircut than feared. Operators with expansion dreams should refine their pitch decks: once the money is secured, JV partners and recapitalizations will follow quickly.

What’s Next? Watch the tariff headlines—any détente could unlock corporate M&A and speed up underwriting; plus, higher materials costs keep new supply muted, boosting rent growth. Clock is ticking: more than $63 billion sits in funds formed three-plus years ago, so investment committees must sign term sheets before capital-return clocks expire. Expect whispers about the Q3 pipeline to leak by Labor Day, and if the Fed pencils in even a quarter-point cut by September, the leverage math gets sweeter, and the floodgates could open.

Source: CoStar

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