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Guest: Todd Henderson, Head of Real Estate for the Americas, DWS
Todd Henderson leads the Americas real estate business at DWS, the asset manager Deutsche Bank took public in 2018, whose real estate platform traces back to RREEF, founded in 1975. He joined DWS in 2003 after a decade at The J.E. Robert Company, where the firm bought billions of dollars of nonperforming loans from 1993 to 1997. Henderson started his career in the “bad bank” at First Gibraltar Bank in the early 1990s, working his first couple of months for free.
Henderson has worked through five real estate cycles, from the RTC era to the recent rate reset, and he argues this one is different: values fell roughly 25% peak to trough, but property fundamentals went into the downturn healthier than ever. He explains why capital is finally flowing back, why he is constructive on Sun Belt multifamily, why real estate debt looks compelling right now, and why hard assets are becoming a hedge against AI disruption.
Key Takeaways
The reset was about the cost of capital, not failing properties.
“Real estate performed really well through this cycle. It was 100% the result of a change in the cost of capital. So discount rates reset, cap rates reset as a result, values came down.”
Todd Henderson, [15:38]
Real estate debt offers lower basis, tighter underwriting, and normal spreads.
“You’ve got values that have come down 25%. You’ve got underwriting that’s definitely more conservative than it was before the interest rate cycle. You’ve got attachment points that are lower. And we’ve got an improving fundamental story.”
Todd Henderson, [22:51]
With residential starts down sharply, Henderson sees a multi-year runway for rent growth.
“I think we’re talking about a ’29 kind of time frame where, up until then, we’re going to see pretty massive rental rate growth because demand is going to exceed supply.”
Todd Henderson, [28:40]
Retail has quietly become one of the healthiest sectors in real estate.
“Retail’s vacancies have not been lower in the last 25 years than they are today.”
Todd Henderson, [35:35]
Investors are starting to treat real estate as a hedge against AI disruption.
“Real estate’s starting to become the AI immunity trade. Like, people are, ‘Where’s a safe place to go hide? Where is the halo?’ Hard asset, low-obsolescence trade: real estate.”
Todd Henderson, [37:59]
