Zell is laying low because of high prices, market volatility

Entrepreneur Sam Zell, who made a name for himself picking up down-on-their-luck commercial properties in the 1990s, has done more selling than buying in the past five years.

Zell has just 30 percent of his personal investments in real estate, down from 40 percent seven years ago. In 1990, the mogul had half of his money invested in real estate, the Wall Street Journal reported.

“We’re dealing with a world that’s dramatically more volatile, and that requires more caution and care than before,” the 71-year-old Zell told the newspaper. “I’m not singing ‘Kumbaya’ like other people.”

In Zell’s view, prices are too high. But his rivals such as Blackstone Group and Carlyle Group have made big acquisitions and area cashing in on the housing market rebound.

Values for commercial properties have hit record numbers this year, with an index compiled by Green Street advisers showing values that fell 61.7 percent in May 2009 from 100 in August 2007, then rebounded to 104.3 last month.

But Zell, for his part, says that many of his competitor’s lucrative deals won’t look so hot once the Federal Reserve pulls back on its market involvement.

Zell has accumulated a net worth of $4 billion in his decades of commercial real estate investing, according to a figure in Forbes magazine cited by the Journal. His sale of Equity Office Properties Trust to Blackstone Group for a record $39 billion netted him around $1 billion personally, sources close to Zell told the Journal. [WSJ] — Julie Strickland