UPDATE 1-Blackstone sees REITs owning much of its U.S. real estate

Feb 13 (Reuters) - Much of Blackstone Group LP's vast U.S. real estate holdings may be bought by, or turned into, real estate investment trusts over the next couple of years, the head of the private equity group's global real estate division said on Wednesday.

Jonathan Gray said the capital markets, particularly the bond market, has opened its arms to real estate investment trusts, making the likelihood that much of its U.S. holdings of offices, homes and hotels will be bought by existing REITs or become REITs though initial public offerings.

"I think much of what we own will end up in the public markets," Gray said while speaking at the Credit Suisse Financial Services Forum in Miami.