By Andrew McIntyre

Law360 (May 5, 2021, 7:24 PM EDT ) As the latest COVID-19 stimulus gets farther in the rear-view mirror and some experts warn of an economic downturn, Blackstone president Jonathan Gray fears the opposite and is concerned about inflation, according to remarks at a virtual DLA Piper real estate conference Wednesday.

Gray, who is also chief operating officer of Blackstone Group, said that while recent signs of rising wages are positive, a massive surge in spending as travel options open up could harm the economy. The comments came during DLA Piper LLP's annual Global Real Estate Summit, which it held virtually for the first time this year.

"I'm worried about an overheating," Gray said in his remarks on Wednesday. "As vaccines are coming along, the dam of the pandemic is going to go away. On the other side of this there's tremendous savings that have been built up."

"There's cabin fever. … A torrent of economic activity is coming," he added.

There are already signs of inflation, Gray said. Commodity prices have risen, as have energy prices. And Gray noted that used-car prices are up 25% and home prices more than 15%.

"I'm concerned less about things slowing down too quickly and more about them heating up too quickly," Gray said.

DLA Piper Tuesday night released a report ahead of Wednesday's conference that included a broad discussion of a variety of asset classes and markets, more than a year into the pandemic.

Blackstone has continued to be active on the real estate front during the pandemic, having invested heavily in the logistics sector and more recently making bets on a rebound in the hotel sector.

"I think people are going to get back on the road," Gray said.

The firm, though, also sees potential in the office market, particularly in areas where there are ample technology firms and where there are plenty of high-skilled workers, Gray said. Blackstone also continues to see opportunities in biotech as well as multifamily, he added.

And Blackstone's continued real estate activity has meant plenty of big ticket legal fees paid to the Big Law firms the private equity shops enlists for its deals.

"Today, the legal fees — and DLA Piper can appreciate this — are bigger than some of the early deals," Gray said, adding that the first real estate transaction he worked on at Blackstone, decades ago, was a $6 million shopping deal. "I wasn't surprised that we weathered the storm. We had long-term capital reserves."

Of course, one of many lingering questions for the commercial real estate sector is how quickly the workforce will go back to brick-and-mortar offices, and how many employees will ultimately go back.

Gray said Blackstone has hired more than 700 employees since the start of the pandemic, and many have yet to work in a brick-and-mortar office. He said that Blackstone had a "bias" for having employees together and in person, and that it expects most to return to the office.

"We believe that we're much better together. As a firm, we don't have the secret formula to Coca-Cola," Gray said. "When it's safe to do so … [and] as we get a vaccine, a vast majority [of Blackstone's employees] will be back."

Gray's remarks Wednesday came as part of a Q&A moderated by David Rubenstein, a co-founder of fellow private equity shop The Carlyle Group.

At one point during the conversation, Rubenstein noted earlier rumors of Donald Trump's having considered Gray for Treasury secretary.

"Biden might call you up," Rubenstein said. "Are you interested?"

It appears not.

"I am committed to Blackstone. I have the most amazing job, and I love what I do. I'm planning on being here as long as I can," Gray said. "Like Ted Williams, you hit a home run and you walk off. … I'm going to keep playing ball."

--Editing by Peter Rozovsky.

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