Blackstone, which derived 45 percent of its earnings from real estate in the first nine months of 2014, has started preliminary conversations with potential investors about the new fund and expects marketing documents to be ready in the next few weeks, the people said.

Blackstone has enjoyed phenomenal success in the sector. Its latest fund, Blackstone Real Estate Partners VII, which raised $13.4 billion in 2012, reported a net internal rate of return of 27 percent as of the end of September. As a result of Blackstone's success in the sector, its head of real estate, Jonathan Gray, is being viewed as a potential successor to Chief Executive Stephen Schwarzman, who is a co-founder of the firm, people have previously told Reuters.

Blackstone has sought to moderate expectations, telling potential investors that it will be hard for the new real estate fund to beat the high returns of Blackstone Real Estate Partners VII, the people said.

The sources spoke on condition of anonymity because Blackstone's conversations with its investors are private. Blackstone declined to comment.

(Reporting by Greg Roumeliotis in New York; Editing by Leslie Adler)