Lauren Hochfelder, Global Head of Real Assets at Morgan Stanley Investment Management, discusses two out-of-consensus investment calls she made during her career: one successful and one unsuccessful. She highlights a successful early bet on industrial real estate driven by the rapid growth of e-commerce in the early 2010s, noting how warehouses transformed from "boring beta bets" to valuable assets. Hochfelder contrasts this with an unsuccessful investment in Class B and suburban offices post-GFC, where the high capital expenditure required for leasing undermined expected returns. This experience led to a portfolio pivot away from office spaces with high capital intensivity, particularly in the U.S. and Australia, and a focus on markets like Japan, where tenants bear the build-out costs.
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