Posted by: union03g | November 11, 2009

Reflecting On Zell’s Speech

I was lucky enough to have attended the Invest For Kids conference at the Chase Auditorium last night where a dream team lineup of investors offered stock picks and market opinions. They ended the 5 hour conference with Zell and it was well worth the wait. Zell walked up and stood like a troll behind the podium, uncomfortable in his blazer (he likes casual clothes), as people patiently waited to hear the man they came to see. He was easily the most eloquent of the bunch, which is saying a lot considering the lineup of the night. His peculiar raspy voice was methodical, it was like a metronome hypnotizing the crowd. It was oration not the spraying of ideas like the others.  He didn’t have note cards or a presentation but never skipped a beat. It’s as if there is a chunk of his brain that is lit up for him, where it is not for us, and he spoke from there. He had no verbal ticks, twitches or hard sell inflection – he spoke candidly and with what seemed to be decades of faith that backed him. It was reassuring to listen, like we could just line up like ducks, right behind. I was listening to the holy grail of real estate minds.

He went on to explain that “hotels will sell for 40 cents on the dollar in two years” and that real estate is nothing but a function supply and demand – they soon will meet again in the middle after lack of supply will fill buildings at lower lease rates. Zell said “there will be a much slower and more difficult commercial unwinding than everyone expects.” That “we are currently down 30% or so from the peak and there is no incentive for transactions right now.” He declared that “we dilute ourselves now, to play another day.” He said, “Demand will return.”

Then the lights dropped and he played a hilarious music video that he created about the real estate market. The song went “Capital is falling on your head….” No one expected Zell to play a music video but then again, no one ever knows what he is going to do next.

One of a kind –

more here:




  1. […] Fire Shifts From Residential To Hotels Going forward we are going to see the concentration of negative news shift from housing to hotels and commercial space. Zillow just reported a stabilization in residential housing prices and more headlines are focusing on the next crisis. I think a lot of hotels will pull through the recession but all the loan modifications will hit banks hard once again. Here is recent example. The beloved Burnham Hotel next to Block 37 purposely defaulted on payments so they can modify their loan terms. Zell also thinks this commercial restructuring will take a long, long time… […]

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