The Real Deal New York

Sam Zell: Foreign investors are not driving up real estate prices

Impact of foreign investors benign in recent years, says CommonWealth REIT board chair

October 10, 2014 12:00PM

From left: Sam Zell and the Waldorf-Astoria in Manhattan

From left: Sam Zell and the Waldorf-Astoria in Manhattan

Sam Zell doesn’t just disagree with the notion that foreign investors are inflating commercial real estate prices in New York City and other U.S. markets. He thinks it’s downright B.S.

The CommonWealth REIT board chairman and Equity Group Investments head used this year’s EisnerAmper Real Estate Private Equity Summit in Manhattan to air his thoughts on the hot topic – which has only gotten hotter following the news this week that a Chinese insurance company purchased the Waldorf-Astoria for a record-setting $1.95 billion.

“I believe the real estate impact of foreign investors in the United States in the past couple of years has been benign,” Zell told the summit, according to Real Estate Weekly. “In other words: they haven’t set the prices, they have gone along with them.”

In contrast to some of the jaw-dropping purchases of trophy buildings by Japanese investors in the 80s, foreign investors are not paying excessively more than domestic buyers would plunk down for the properties, Zell said.

Zell did say he expects investment volume to pick up in New York City, colorfully noting that Gotham is “looking like the best broad” in the bordello. [REW]Tom DiChristopher

  • FXREtrader

    well he is wrong and clearly doesn’t understand the demand for fiat currency.

  • ralphpetrillo

    Well if you want a 1% return, their investments make sense. Pay $1. 9 billion, pay a huge management fee and earn exactly what? The earnings have not been disclosed. On a positive side NYC collects a huge fee for this transaction.

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