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