Todd Henderson

As the global co-head, and lead, of DWS Group’s Americas real estate strategy, Todd Henderson oversees a $35 billion domestic portfolio that grows into an $80 billion business when international markets are brought into the equation. 

At DWS, a German-based asset manager, Henderson manages several funds on the debt and equity side that invest across the risk spectrum, up and down the capital stack, where he’s been comfortable blending sectors together in one portfolio while sticking to single assets in another. 

One reason Henderson has been so successful is because he’s invested out of traditional office and into residential and industrial asset classes at pivotal moments for each asset class.  

“We’ve continued to be really constructive on the residential and industrial sectors,” said Henderson. “Supply continues to come down, demand picks up, so those have served us well.”

Henderson has the Federal Reserve high interest rate regime to thank for the current construct of the business. “We took advantage of the crisis to focus on emerging from the interest cycle with a business that gives clients more access to our centers of excellence across the risk and return spectrum and up and down the capital stack,” he said. 

The firm’s returns were somewhat buffered from the interest rate led repricing of real estate due to the overweight of industrial in the portfolio and the corresponding “mark-to-market opportunity” for DWS to raise rents to market rate levels in its existing industrial portfolios. 

“That cushioned a material amount of the discount rate changes that investors wanted, or demanded, as a result of interest rates rising,” he said. “The combination of overweighting the industrial sector, and underweighting the office sector through the last cycle, has helped us a lot.” 

Henderson has kept DWS consistently overinvested into industrial because of the bet he’s placed on e-commerce’s continued growth. As he explained it, the existing U.S. supply chain is built for three-day delivery, but he believes all consumers will soon expect one-day or same-day delivery, creating the necessity for an industrial product built closer to population hubs in major U.S. cities and ports. 

“Those markets saw the most significant movement in rents as this e-commerce revolution took off,” he said. “In some cases, 100 percent [increases].”