Jonathan Gray, Blackstone’s Real Estate Wizard Behind the Curtain

He's taken over the world, so why not the firm?

Real estate is typically a buy-and-hold business, while Mr. Gray’s mantra is more in-line with the private equity industry: buy, fix, sell. The gestation for a property is normally three to four years, though he has shown a willingness to wait longer if the profits are not there, which has especially been the case of late.

More than his intelligence, it is his detachment that sets Mr. Gray apart. He has never fallen in love with the buildings buys—he does not have an edifice complex, he does not chase trophies. His focus, even obsession, with returns has helped the firm sell coveted Manhattan office towers to someone like Harry Macklowe, while three years later he is licking his chops over warehouses by the side of the highway, gushing to colleagues about cap rates and falling replacement costs. Mr. Gray emphasizes quality, but not necessarily sex appeal.

“He is driven by pure self-satisfaction,” said Hilton Worldwide CEO Chris Nasetta, whom Mr. Gray has known from real estate deals for years and who he handpicked to run the company. His enjoyment is almost as calculating as the deals themselves. Mr. Grayt certainly does not seek the adulation of the press or even his peers, just the size of his bottom line, the glory of the returns. One friend said he is always pushing himself to do more, that he is never satisfied.

Mr. Nesetta and others also speak highly of Blackstone’s involvement in the businesses its buys. Whereas most competitors farm out the management of their properties, Mr. Gray keeps a close watch, which not only informs decisions at the specific holding but also across the firm. Mr. Gray wants to keep an eye on every penny, every decision, to maximize profits, but there is also another return. Information is paramount, and a big part of Blackstone’s success comes with being involved in so many different types of deals, in different sectors, different regions, different scales. “It’s a big competitive advantage,” Mr. March said.

Mr. Gray is fond of saying that his family is his other full-time job, and that between that and his real one, there is little time for much else. “Jon does work a lot, but he loves what he does,” Mr. Henry said. Mr. Gray makes it home every night for dinner and will reschedule meetings for a recital or a soccer game, though he also freely checks his Blackberry and works late into the night at a home office inside his five-bedroom co-op at Park Avenue’s oldest prewar apartment building. To make sure the girls grow up with the old man’s humility, there are the charities, like the Harlem Village Academy, but also two kids to a bedroom, even though there is room for each to have her own. Mr. Gray walks the mile-and-a-half to work every morning, and he prefers a simple Timex Ironman watch to something flashier—it also helps the avid runner keep track of laps.

“He’s a pretty cool, level guy,” said Jonathan Mechanic, the high-powered Fried Frank attorney who has been across the negotiating table from Mr. Gray on a number of occasions. “He’s not a table pounder. You don’t necessarily have to pound the table to get the results you want.”

Mr. Grey’s greatest asset may be his Midwestern mien. Mr. Ackman, who grew up in a real estate family, said his friend stood out in an industry full of characters precisely because he does not stand out. “He’s highly skilled, people like him, and so people trust him, and in a world where you don’t know who you can trust, it’s good to know you can take him at his word or a handshake,” Mr. Ackman said.

“People trust Jon, so they open up more,” Mr. James said. “In making deals, the more insight you have, the more you can influence the process, the better positioned you are to make a deal.” It is the Midwestern version of keeping your friends close but your enemies closer—in so far as Mr. Gray has no enemies. “He’s a closer,” said Mr. Roth, admiringly. “His objective is not to get into a big drama. His objective is to make a big deal and move on.”

Modest or manic, Mr. Gray is said to keep a low profile because he does not see the benefit of raising his, and would simply prefer to be another cog in the Peterson-Schwarzman machine. Which is not to say he is a hermit—friends describe him as animated and gregarious, but above all else, humble—he simply likes to keep things to himself. That way he can still enjoy his four daughters’ extracurriculars and not appear in The Post with his head photoshopped onto various creatures, as has happened to both of Blackstone’s founders. There is also the fact that, Blackstone being what it is, Mr. Gray’s reputation precedes him, and the press plays not role ing furthering his business interests, which are really the only interests he has. It stokes egos and fires competition and little else. “He doesn’t need the press to help him, that’s for damn sure,” Mr. Peterson said.

Try as he might, Mr. Gray may not be able to stay hidden much longer. Mr. James has big plans for his big man, according to multiple sources. “Tony James is going around telling people, ‘My job in life is to convince Jon Gray to take my job,’” as one of them put it.

Mr. James did not recall making that statement, but during the interview, he allowed that “I think he’d be great at it.” So is Mr. Gray the future of the firm? “He is certainly one of the talented individuals of his generation who could do a fantastic job running the firm. Better than me.”

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Jonathan Gray, Blackstone’s Real Estate Wizard Behind the Curtain