Zell has his finger on the pulse of the commercial and residential real estate markets and therefore has some good insight on how the American economy is trending. Some of his comments from the interview with Bloomberg include:
- Having just completed the $6.5 billion deal for Archstone (as CEO of Equity Group Investments) Zell explains that the attractiveness of Archstone was that it held assets that have a “high barrier to entry.” What he means is that it is easy to put up a new residential apartment building in Atlanta, but it is not so easy to put up a new highrise in New York (which are the type of assets he has acquired).
- He thinks the American economy is the strongest economy in the world, but that is like being the tallest person at a pigmy gathering.
- The housing market is recovering more slowly than conventional wisdom thinks, but is recovering.
- Zell agrees that the housing market will help provide new jobs (agrees with Warren Buffett), but is concerned that job losses elsewhere will offset much of this benefit (i.e. Citigroup just cut 11,000 jobs).