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Zell Says Value Comes From Having a Liquid Security

06/09/2010 | By Jason C. Flynn

Zell Says Value Comes From Having a Liquid Security
REITWeek2010: NAREIT's Investor Forum® got underway in Chicago today with one of the industry's most highly regarded experts taking the stage to share his opinions on the REIT industry. Sam Zell, chairman of Equity Group Investments LLC, discussed his belief in the inherent strength of REITs and their ability to continually prove their worth throughout various market conditions.
 
"One of the great advantages of the REIT industry is the consistency," Zell said. "The size of the REIT market today is approximately $500 billion, and in January 1993, it was $6 billion. That's an impressive compounded rate of growth."
 
"For an asset class to have grown in the time frame we're talking about, to have gone through all the things it has gone through, I'd say that the REIT markets have done very well to date."
 
Zell also spoke about the entrepreneurial spirit that drives the creation of many REITs. However, he warned of the danger that poorly defined REITs, what he called "orphans," can create. Even with orphans diluting the market, Zell was quick to remind the audience of one the core benefits that all REITs provide. 
 
"Value comes from having a liquid security," Zell said.
 
Even with his colorful reputation, the self-described "Chairman of Everything and CEO of Nothing" maintained that his success, not unlike the success of REITs themselves, can be attributed to maintaining a focus despite unexpected outliers.
 
"I've always focused on simplicity—on a clear message, a clear mission and on a clear objective," Zell said. "I've always been extraordinarily concerned about culture. About maintaining an open and challenging culture [in a company] and an environment where people can aspire and achieve. "