Sam Zell, Steve Roth and Bill Mack – The View From 10,000 Feet

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Yesterday was the NYU Schack Institute’s annual REIT Conference at the Pierre Hotel. It was a great event filled with some of the biggest names in real estate. This years event was very optimistic and covered topics such as the amount of leverage REITs should carry and how dividends should be distributed. There were varying points of view, but what I want to focus on for this post is the panel of Sam Zell, Steve Roth and Bill Mack. Rather than write a formal post, I’m just going to highlight some of their major points.

Sam Zell

For the first time, when investing in the United States, I have to plug-in political risk.
I gave him (McCain) a lot of money and he lost, had I known that, I would have given him more.
Real estate became too popular.
He who fails to learn from history is condemned to repeat it.
Advice: “go to medical school”

Steve Roth

I voted for the President…and I have enormous remorse.
We desperately need a catalyst (like 1st Ban of Chicago in the 90s).
Everyone has their fork and knife, but there’s no food on the table.
If you can predict what’s going on with interest rates and cap rates, you’re in business.
Advice: “go to sleep for 3 years then wake up, like Rip Van Winkle.

Bill Mack

70% of the office buildings are owned by the banks, the owners just don’t know it yet.
The strong will flourish and survive, the weak will falter.
The amount of equity you need to put in a deal will be much greater over the next 5-7 years.
The field won’t be as entrepreneurial as it once was.
In good times the idea is worth 99% and the capital 1%. Now the capital is worth 99% and the idea 1%.
FIRPTA Rules will be reworked to create a more favorable tax structure for foreign investors.

Just a little taste of the ideas that were being thrown around at the conference yesterday. What do you think?

I imagine this is completely illegal, but I uploaded a short clip from the panel. Listen to it all the way through to get a bit of essence of the infamous Sam Zell.

Sam Zell (mp3 File)