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NEW YORK CITY-Declining values drove a year-over-year drop in six-month revenues for the Blackstone Group’s real estate segment, the private-equity company reported on Thursday. However, the segment’s second-quarter loss was a fraction of the losses incurred in the first three months of 2009, and overall the company swung to its first quarterly profit in a year.

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

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

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

Overall, Blackstone’s total segment revenues vaulted upward by 781% to $403.6 million in Q2 compared to the Q1 tally of $45.8 million and up 7% from the $376.5 million in Q2 ’08. After-tax net income for Q2 was $180.8 million, a 9% increase from the Q2 figure of $165.6 million.

Noting that Blackstone “remains focused on creating lasting value,” chairman and CEO Stephen Schwarzman says in a statement that “this means investing prudently in the areas where we see the greatest long-term value and remaining cautious in areas where we expect further value declines.” He adds, “We currently have the largest amount of available capital in our history.”

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