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Holmes Osborne
Holmes Osborne

Sam Zell’s Thoughts

April 28, 2008
The Milken Conference in Los Angeles was kind enough to grant me a press pass to represent Sam Zell, T. Boone Pickens, Schwartzeneger, William Bennett, and Steve Forbes are just a few names of the great speakers in attendance.

Zell was on a panel focusing on real estate, moderated by Michael Milken. The bullet points below are a few of the points that Zell made.

  • The commercial real estate market will do better than the residential market because demand is larger than supplies.
  • Any time that the U.S. government has tried to increase home ownership by over 62%, a disaster has occurred.
  • Zell sees some debt as a very attractive buy at 40¢ on the dollar.
  • Groups with large pools of investments such as CALPERS and insurance companies cannot sit on the sidelines forever. If they have a 7% bogey to meet and they are earning 2% on their investments, they are going to need to earn more.
  • The real estate market and overall economy has changed from years past. Couples are deferring marriage. It used to be that couples married a few months after college graduation. Now, it can be ten years.
  • Fannie Mae and Freddie Mac are still making loans to owners of apartment buildings. It is part of their mandate.
  • Zell spoke about looming inflation. Even though the CPI indicated inflation was low, the average American knew better. People were buying real estate to outpace inflation.
  • He pointed out that one of the most overlooked statistics is that farmers plan on planting 12 to 15% more corn next year. This is on top of the current record planting.
  • $120 oil is unsustainable.
  • There are always opportunities. However, these opportunities are not always scalable. The amount of liquidity in the world is in excess of supply. The U.S. dollar is in a liquidity problem.

By Holmes Osborne of and

About the author:

Holmes Osborne
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.6/5 (18 votes)


Commodity - 7 years ago
can you rent it out

and pay for it

Itznuthin1 - 7 years ago
very useful tips, thanks.

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