Jon Gray, president of Blackstone Group, looks at the market with anticipation.

Gray told the Financial Times that as the alternative asset manager surpassed $1 trillion under management for the first time, Financial Times The deal drought that plagued commercial real estate last year may finally be over.

“Markets will normalize and deal activity will pick up,” Gray told media on the same day as Blackstone’s second-quarter earnings report. He cited the possibility of a further market correction, but said the broader economy appeared to have weathered the “inflation shock” and most of the “rate shock” with inflation already down to 3%.

A year ago, shortly after the Federal Reserve launched a series of aggressive rate hikes to slow inflation, commercial real estate activity largely ground to a halt. Blackstone has proven more of a seller than a buyer in recent months, with its flagship REIT sometimes struggling and even restricting withdrawals.

Still, the company’s fortunes appear to be on the rise. In the second quarter, Blackstone generated $1.2 billion in distributable earnings (usually a good indicator of a company’s cash flow), and it beat expectations in the process.

Meanwhile, Blackstone Real Estate Income Trust is enjoying its strongest one-month return in nearly a year. BREIT returned 0.96% in June, the fund’s third straight month of positive returns.

If Gray’s forecast of deal activity proves correct, Blackstone could be a big part of the reason. The company has amassed a large stockpile of dry powder ready to deploy at short notice.

In April, Blackstone closed the latest in a string of global real estate investment funds after raising a staggering $30.4 billion in capital commitments. It is the “largest real estate or private equity drawdown fund ever raised,” the firm said. As of closing, Blackstone’s international funds had capital commitments of up to $50 billion.

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