Morris Chen of DoubleLine Capital - Commercial Real Estate

Apr 8, 2025

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Today on the podcast, Rusty and Robyn are joined by Morris Chen, Portfolio Manager at DoubleLine Capital. Mr. Chen joined DoubleLine at its inception in 2009. He is a Portfolio Manager leading the CMBS/CRE Debt Investment team and CRE New Investment Review Group, and is responsible for the oversight and management of all CRE Debt related investments at DoubleLine. Mr. Chen is a permanent member of the Fixed Income Asset Allocation and Structured Products Committees providing valued insight into the CMBS sector. He is also an active participant and speaker at CREFC events. Prior to DoubleLine, Mr. Chen was a Vice President at TCW where he was responsible for CMBS credit analysis and trading from 2004-2009. He holds a BS in Business Administration with concentrations in Business Development and Finance from the University of California, Riverside.

Key Takeaways

[03:23] - Morris’ professional background and more on his current role at DoubleLine
[04:43] - Learn more about DoubleLine Capital and the culture there
[06:06] - Why has commercial real estate been in the headlines so much the last couple years?
[08:41] - Are the current concerns in commercial real estate largely driven by the work from home movement, or are there other dominant concerns? Also, what other sectors make up commercial real estate aside from office buildings and retail spaces?
[10:48] - Big picture, what is currently going on in the current commercial real estate market? How have shifting interest rates and inflation influenced the sector?
[12:41] - What other challenges is Morris seeing within commercial real estate?
[15:43] - Where is Morris seeing the most attractive opportunities in commercial real estate today? Are there specific sectors they are focusing on?
[18:10] - What are the meaningful differences between investing in commercial real estate equity vs. commercial real estate debt?
[20:22] - What does Morris think the future of major cities will look like in a post-Covid world?
[23:31] - What does DoubleLine think about the possibility of increased inflation and is commercial real estate a good hedge against inflation?
[24:55] - How do Commercial Mortgage Backed Securities (CMBS’s) work and how do they fit into an investment portfolio?
[27:35] - What is Morris’ outlook on CMBS and what role do they play in the strategy they currently manage?
[29:29] - What can Morris share with us about the status of the private real estate debt market?
[32:23] - What role should commercial real estate play for individual investors trying to build diversified portfolios?
[33:56] - An overview of the DoubleLine commercial real estate fund and its investment strategy. Also, what makes it different from other commercial real estate funds?
[36:11] - What guiding principle or philosophy shapes their approach to managing the fund?

Quotes

[05:03] - “I think [DoubleLine’s] independence brings forth stability, in terms of the portfolio management team as well as investment teams. The employee ownership…dynamic is also important as well. We are very very proud to say that myself, as well as a lot of our sector heads and portfolio managers, together we collectively have worked togethered for essentially our entire careers - well over 20+ years…That also just goes into the performance of our funds. It’s consistent, you don’t have much turnover, and I think that, to me, is paramount when you think about DoubleLine and part of our strengths.” ~ Morris Chen

[27:35] - “Yeah, I think the outlook [for CMBS] is still very positive, and it’s more so on a relative value basis. I’m not here to tell you that it’s very very cheap…on its historical viewpoint…[However], I can tell you that in an environment where investors want Fixed Income, but then they look at the yield that a corporate bond is generating, you can actually come to the CMBS market and buy a similar risk, similar rated bond and pick up that excess yield.” ~ Morris Chen

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