For Sam Zell, it’s all about “foreclosures and opportunities”

The Grave Dancer has billions in cash to deploy but will stay away from the sector he calls “a falling knife”

National /
Jun.June 30, 2020 04:00 PM
Photo illustration of Sam Zell (Getty, iStock)

Photo illustration of Sam Zell (Getty, iStock)

Sam Zell’s Equity Commonwealth real estate investment trust has $3.4 billion in cash ready to deploy in these times of distressed assets, but the self-described Grave Dancer isn’t ready to tango in one sector: Retail.

Zell, who is also chairman of Equity Residential and Equity Lifestyle Properties, said his companies “don’t buy markets, we buy deals.” And with retail real estate, he’ll likely steer clear, he said. In a Zoom interview with SkyBridge Capital founder Anthony Scaramucci, Zell called retail “still very much of a falling knife,” according to Crain’s Chicago.

Zell expects banks to be less forgiving with borrowers, choosing to jettison the “extend and pretend” strategy that many took during the last financial crisis. Banks tended to hold off on foreclosures back then, he said, with the hope those loans would resolve themselves as the economy recovered.

“I think the lending community this time around very much wants to, quote, clean the books,” Zell said, according to Crains. “And I think there are going to be a lot of foreclosures and opportunities.” He added that some investors who might have survived the last few months could falter when banks come knocking.

Zell built up a massive war chest of cash with a huge selloff of properties over the last several years. Equity Commonwealth sold around 150 office properties in recent years, leaving it with just five today.

Zell expects “some significant recovery” from the pandemic-fueled market crisis by year end, and appears optimistic about the economy generally.

“I think just what you have seen in the last few weeks since there’s been some partial openings of various places around the country, people have been willing to spend and in fact, seem to be very excited about the opportunity to get back into the commerce side of the world,” he told Scaramucci. [Crain’s Chicago] — Dennis Lynch 


Related Articles

arrow_forward_ios
(iStock illustration by Kevin Rebong for The Real Deal)
Morgan Stanley bans unvaccinated staffers from offices
Morgan Stanley bans unvaccinated staffers from offices
Sure We Can has tried to purchase the property in the past (Facebook via Sure We Can, Getty)
Lifeline for canners needs city’s help to buy redemption center site
Lifeline for canners needs city’s help to buy redemption center site
Photo Illustration of Airbnb CEO Brian Chesky and Vrbo CEO Jeff Hurst (Getty)
Home invasion: Vrbo aims to poach listings from Airbnb as summer heats up
Home invasion: Vrbo aims to poach listings from Airbnb as summer heats up
Confidence is lowest in the Northeast and Midwest, at 73 and 70. (iStock)
Homebuilder sentiment slides to 10-month low in June
Homebuilder sentiment slides to 10-month low in June
The Savoy Hotel in London, UK in 1980 (Getty)
UK hospitality employers could cut half a million jobs
UK hospitality employers could cut half a million jobs
The commercial market was hit hard by the pandemic, and property tax revenue is expected to fall 5 percent. (iStock)
Tax bills show how much Covid devalued NYC real estate
Tax bills show how much Covid devalued NYC real estate
Employers project 62 percent of workers will come back to Manhattan offices in September (iStock)
Over 60% of Manhattan office workers will return in September: survey
Over 60% of Manhattan office workers will return in September: survey
(iStock)
Chinese developers find buyers for bonds, despite some defaults and specter of further regulation
Chinese developers find buyers for bonds, despite some defaults and specter of further regulation
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...