Time to Buy Commercial? Zell Thinks So!

Has the commercial real estate market hit a bottom? Chicago real estate financier Sam Zell seems to think so after he recently disclosed a 7.7 percent stake in Starwood Hotels & Resorts Worldwide. Many see this major purchase as a sign that his opinion on the market may be turning after he began selling the REITs last February. They are speculating that he will takeover the company and sell off the undervalued properties in the higher market to realize gains - a similar buy quicker move than his idea the last time around!

The billionaire Sam Zell made his fortune during the S&L crisis during the 80’s and 90’s when property values plummeted. He became one of the first to utilize public money to invest in these entities through REIT - or Real Esate Investment Trusts. His Equity Office commercial firm was sold to the Blackstone Group near the top of the bubble while his Equity Home remains a public company that is also doing very well. This history is exactly why many take his actions very seriously as he appears to be able to predict the tops and bottoms of this market with extreme accuracy.

So, is it time to get back into the commercial real estate market? Well, credit may be a little harder to access these days, but it looks like at least one big investor is betting that we are very close to a bottom. It may be something worth watching!

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