Real estate entrepreneur Sam Zell, who in 2007 sold his supersize real estate portfolio, Equity Office Properties Trust, to the Blackstone Group (BX) for $39 billion, had choice words Thursday for billionaire investor Wilbur Ross and all the other wannabe experts on the commercial real estate crisis.
According to the WSJ, Mr. Zell, apparently taking issue with recent comments Mr. Ross made about a massive crash hitting commercial property markets, said for “all the new savants on commercial real estate (like) Wilbur Ross…I find their comments..are inversely related to our knowledge of the industry.” [WSJ]
Mr. Ross commented recently that a huge U.S. commercial real estate crash is in its beginning stages. He said he was practicing extreme caution on the CRE investments front, especially with regard to office spaces, which are rapidly shedding tenants.
Speaking in front of packed room at the Waldorf Astoria, Mr. Zell told the audience of the Capital Markets in Real Estate Conference sponsored by the NYU Schack Institute of Real Estate, that his view on commercial real estate was less apocalyptic than the other doomsayers.
While he recognized continued challenges for the sector ahead, Zell said he expects that by mid-2011, building vacancies won’t be an issue, and that other performance metrics such as cap rates will be more important.
Zell said also new development will remain contained in the foreseeable future and that institutional investors will step up to give much needed capital infusion to distressed property owners.
He offered these parting words of advice for real estate investors: “You gotta come clean by ‘13″.