Todd Henderson

The power of alternative asset manager DWS Group comes from its size. The firm, which counts Deutsche Bank as majority owner, has $65.6 billion in assets under management, representing 356 properties accounting for 108.2 million square feet of rentable space in the U.S. alone. 

That portfolio has performed fairly well. Take DWS’s non-traded RREEF Property Trust, whose properties were 94 percent leased at the end of last year, with leases that average about six years (excluding those for residential properties). 

“We’ve been in — I’ll call it — a real estate recession for the last three years. We were really disciplined about our investment themes and thesis and sticking to them, which afforded us opportunities,” said Todd Henderson. “As pricing was resetting, many real estate firms were having trouble with their existing portfolio, but we didn’t. So that afforded us the opportunity to be really proactive about positioning our business for growth on the backside of this cycle.”

DWS is doubling down on residential, having launched a new multifamily fund last year. With rents high and supply low, the sector is poised for growth. In the past year, the trust paid $96 million for a 247-unit property in Orlando and $101 million for a 214-unit complex in Denver.  

In Fort Lauderdale this year, it sold two office buildings for a combined $428 million. The deals were Broward County’s biggest office transactions in about a decade (though totaled about what DWS paid for the properties years earlier). In San Francisco, it’s looking to sell an office building at a loss after owning it for two decades. 

“Even before COVID, we started to underweight our portfolios to office,” Henderson said. “If you’re in a market that is not seeing a lot of job growth and you have older assets, it’s not a great recipe for outperformance. We thought we could take the capital from [the sales of the Fort Lauderdale office buildings] and redeploy it in other sectors and over the next five years get outsized returns relative to what we thought we could get on those office assets.”