Sam Zell Talks About the Evolution of REITs
May 7, 2018 | Dawn Wotapka | REIT Magazine
Sam Zell isn’t known as subtle, but that’s exactly how one might describe the entrance to his office tucked in the heart of a bustling Chicago office plaza. There are no ornate signs to alert visitors that just beyond the routine lobby coffee shops lies the headquarters of Equity Group Investments and a visionary who has helped transform the REIT space into a mainstream asset class with an equity market capitalization in excess of $1 trillion.
Back in the early 1990s when most of the traditional sources of capital for the real estate industry had dried up, the public capital markets were the only place to turn. But, in order for the modern REIT era to take hold, real estate’s Wild West reputation had to change. Enter Zell, who became a highly vocal and active champion of the listed REIT approach to real estate investment. Zell championed the transparency, predictability, and accountability that REITs bring to the industry—cornerstones that remain selling points for investors today.
It was Zell’s then public Equity Office Properties Trust that became the first REIT added to the S&P 500 in 2001, a tremendous milestone and validation for the industry. In 2007, Zell received an offer he couldn’t refuse and sold Equity Office to the Blackstone Group for $39 billion, the largest leveraged buyout deal to that point.
