Bloomberg Businessweek Critical Section of Real Estate in Focus for Wealth Managers
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Dec 10, 2025 Lauren Hochfelder is the Co-CEO of Morgan Stanley Real Estate Investing, with extensive expertise in property investment strategies. In a dynamic discussion, she shares insights on the real estate market, predicting a recovery by 2026 as values drop around 25%. Lauren highlights resilient sectors like residential and senior housing, noting an undersupply in the latter. She elaborates on the financial dynamics of senior housing and the societal impacts of eldercare, emphasizing the growing demand due to an aging population.
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Market Nearing An Inflection Point
- Real estate has been in a multi-year correction but appears to be at an inflection point heading into 2026.
- Lauren Hochfelder cites motivated sellers, renewed buyer interest, and open debt markets as recovery signals.
Occupier Pause Drove Industrial Weakness
- Uncertainty after 'liberation day' paused occupier decision-making and caused industrial rents to drop.
- Longer leasing decisions by CEOs and CFOs amplified the dislocation in capital and occupier markets.
Residential Seen As Fundamental Demand
- Necessity-based residential assets are undersupplied and generally more resilient.
- Lauren highlights living (residential) as foundational infrastructure supporting daily life.