May 18 2023
Picture courtesy of The Real Deal
Sam Zell, the maverick outspoken real-estate tycoon and self-made billionaire who founded a property empire has died, his company announced on Thursday. He was 81 years old.
Zell, the son of Polish Jewish immigrants was the chairman of Equity Group. He was a visionary who helped transform the Real Estate Investment Trust (Reit) space into a mainstream asset class with an equity market capitalisation worth more than of $1trillion in the US.
Back in the early 1990s when most of the traditional sources of capital for the real estate industry had dried up, the public capital markets were the only place to turn.
Zell became a highly vocal and active champion of the listed Reit approach. He encouraged pension funds and other asset managers to invest in Reits as the asset class was transparent and predictable.
Zell’s public Equity Office Properties Trust became the first Reit added to the US’s S&P 500 in 2001, a tremendous milestone and act of validation for the industry.
In 2007, Zell sold Equity Office to the Blackstone Group for $39bn; the largest leveraged buyout deal to that point.
Reit dispensation was adopted by South African property funds in late 2013 and early 2014. SA Reits pay at least 75% of their distributable income as a dividend each financial year. They are popular with people who want to earn regular income from their shares.
This is an ongoing story.
alistair@propertyflash.co.za