The real estate segment had negative revenues of $231.5 millionfor the six months ended June 30, compared to positive revenues of$34 million the year prior, according to Blackstone's Q2 report. Ona quarter-to-quarter basis, Q2 losses shrank to $18.9 million from$212.6 million in Q1. Similarly, net income for the segmentimproved to negative $25.1 million for Q2 from negative $187.9million in Q1 and negative $59.1 million in Q2 2008.

A notable year-over-year improvement was seen in the segment'sfee-earning assets under management: a quarterly increase of $657.2million from Q1, and $2.4 billion year-over-year, to $23.5 billionas of June 30. Also up were net fee-related earnings fromoperations, which totaled $32.9 million in Q2, up from $30.5million for Q1 and $22.8 million in the second quarter of '08.

Offsetting these gains were a $121.6-million depreciation in thefair value of Blackstone's real estate portfolio and a$275.9-million decline in performance fees and allocations for thefirst six months of '09, Blackstone reported. The bulk of thelosses in performance fees occurred during Q1.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.