Sam Zell's favorite markets

Posted by: Amey Stone on November 21, 2005

Last week I heard famed real estate investor Sam Zell speak at an investment conference. Much of the discussion was about his investments in single family housing in Mexico and his worries about investing in India and China.

He also reeled off his favorite U.S. markets (I assume he was referring to the commercial real estate markets). They were:

Seattle
suburban San Francisco (other than Silicon Valley)
Stamford, CT
Boston

In general, he was optimistic about U.S. real estate market, noting there is plenty of cash to invest and it still costs so much more to build a new office building than it does to buy one that there is room for more gains.

“In my 40 years in real estate, I’ve found there is only one metric that matters — replacement cost.” He says the spread between a building’s replacement cost and its economic value is as wide today as it was in 1993 — mainly because the cost of construction has increased.

He admitted that like most real estate investors he’s always optimistic. “In every market and in every situation there is opportunity,” Zell said.

Reader Comments

Realty Counselors

August 9, 2007 2:31 AM

Sam Zell's prediction has so far been true. While the current real estate is in the decline mode, there will be no crash in the real estate market because of inflationary pressures. Expect to see a market rebound

Realty Counselors

August 9, 2007 2:33 AM

Sam Zell's prediction has so far been true. While the current real estate market is in the decline mode, there will be no crash in the real estate market because of inflationary pressures. Expect to see a market rebound

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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