* Jonathan Gray to become president, COO of Blackstone
* Sets Gray up as successor to CEO Schwarzman
* Gray built up Blackstone's real estate unit (Adds CEO quote, context on real estate business and industry)
NEW YORK, Feb 13 (Reuters) - Blackstone Group LP said on Tuesday that Jonathan Gray, who turned the buyout firm into the world's biggest real estate investor as head of its property business, will take over from Tony James as president, setting him up as successor to Chief Executive Stephen Schwarzman.
Gray, who was already widely recognized internally as heir apparent to Schwarzman, will become president and chief operating officer and James will stay on as executive vice chairman. Both will report to Schwarzman, Blackstone's co-founder.
"The appointment of Jon as President and COO lays the foundation for the next generation of senior management and positions the firm well for future leadership," Schwarzman said in a statement.
Blackstone also said Ken Caplan and Kathleen McCarthy will be global co-heads of real estate, succeeding Gray.
The appointment also underscores the importance of Blackstone's real estate business, which manages $115 billion in assets and provided almost half the firm's revenues in 2017.
Private equity firms - which typically buy companies with the aim of selling them at a profit, usually after three to five years - rose to prominence in the 1980s and 1990s and several have now laid out plans for the next generation of managers.
Rivals such as Carlyle Group LP, KKR & Co LP and Ares Management LP announced succession plans last year.
Last month, Blackstone agreed to buy a majority stake in the Financial and Risk business of Thomson Reuters Corp , the parent of Reuters News. Reuters News will remain part of Thomson Reuters.
(Reporting by Joshua Franklin in New York; Editing by Ian Simpson and Susan Thomas)