Sam Zell launched his storied real estate career in Michigan, flipping apartment buildings in the 1960s. Since then, Chicago-based Zell has bought and more recently sold scores of office buildings in secondary markets. While his latest dispositions have coincided with a strong seller’s market, Zell has publicly voiced larger concerns about the future of secondary real estate markets.
“Some major changes are taking place in society,” said Zell, chairman and CEO of Equity Office Properties Trust, addressing a New York University-sponsored REIT conference in Manhattan last month. “And these changes are translating into a series of dynamic, 24/7 cities. That’s where the workforce is going, and that’s where it will continue to be because people won’t gravitate as much to secondary cities.” He identified Des Moines as one such city.
Zell is taking his own advice to heart. In November 2004, Equity Office sold off its five-building Houston portfolio, which accounted for 2.2% of the entire national portfolio. That same month, the firm also parted with its 4.2 million sq. ft. Dallas portfolio — and that chunk represented 3.4% of the firm’s total portfolio nationwide.
Proceeds from these sales have financed several big coastal deals that you can read about by accessing the full article here.
The full article written by Parke Chapman and posted April 20, 2005 at NREI Online.
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