Blackstone’s Jonathan Gray was sharing what he learned at a conference in New York last week

Chinese became the biggest investors in US real estate last year, but the man in charge of Blackstone’s $80 billion in property assets believes that more is on the way.

Speaking at an investment conference in New York, Blackstone’s head of real estate Jonathan Gray, told the crowd at the Seeking Alpha conference in Manhattan that the wave of foreign purchases of US property assets, which the Chinese are leading, is still in its early stages and that he expects the current cycle still has some distance to run.

Gray, who controls more than $80 billion in real estate assets for Blackstone predicted that asset prices will continue to rise even in gateway cities like New York, and said he believes that even overseas investors like Anbang, who paid a record high price for the Waldorf Astoria hotel, are getting good deals.

Blackstone Says It’s Still Early Days

Addressing concerns that Chinese investors, like the Japanese in the 1980s, were buying in at the top of the market, Gray indicated that he doesn’t see the situations as parallel.

Gray personally negotiated the sale of the Waldorf Astoria to Anbang Insurance last year for $1.95b

“It’s always easy to say foreigners are showing up, therefore it’s the top of the market. It’s the Japanese with Rockefeller Center, that kind of thing. I don’t think that’s always the case,” Gray told the conference audience.

The Blackstone executive also pointed out differences between the real estate market in 2015 and the situation before the global financial crisis in 2007, which caused property values to plummet.

“We have a lot less leverage in the system. Back then people were 90-plus percent levered,” Gray said at the conference. He also pointed out that in 2007, “We had a lot of building going on and we were late in an economic cycle. We don’t have those conditions today. That would argue that real estate is going to do fairly well in the next couple of years.”

In contrast to the end of the last cycle, Gray, who is considered a leading authority on New York’s real estate market, said that right now, “There’s not a ton of building going on, leverage in the system is reasonable and we still think this economic cycle has a bit of a ways to go.”

Gray Bullish on Chinese Investment Prospects

The comments by Gray echoed remarks that he made last month at a separate conference, in which he specifically addressed the prospects for Chinese investment in US real estate.

“I think it’s early days in terms of foreign, and particularly Chinese, investment,” Gray told the audience at an event organised by New York University.

Gray went on to praise the purchases of trophy assets by Chinese investors and noted that “buying in markets like New York and London has proven to be rational.”

As chairman of Hilton Hotels – which is majority-owned by Blackstone, Gray personally negotiated the sale of the Waldorf Astorial hotel to China’s Anbang Insurance last year for $1.95 billion. The deal is the largest single purchase to date of an overseas real estate asset by a Chinese investor.

Blackstone also sold an office park in London to China Investment Corporation, the country’s largest sovereign wealth fund, for $1.28 billion in late 2013.

In New York last week Gray also pointed out that while he’s optimistic about the market there, Blackstone is still looking for assets in China. In May this year Blackstone was rumoured to be acquiring a commercial complex in Shanghai for RMB 5.3 billion ($853 million), but no transaction has been disclosed to date.

Blackstone Predicts More Chinese Investment in US Real Estate