May

7

Sam Zell Predicts Commercial Real Estate Resurgence

Filed Under Economy 

Sam Zell, chairman of Equity Residential, predicts more capital will begin flowing to commercial real estate investments and commercial mortgage backed securities in the near future. If his outlook is correct we could begin to see some much needed liquidity in the financing realm.

For the first time since July, when credit markets froze in reaction to rising home-loan defaults, investors are starting to move their money from Treasury bonds, whose returns are below the inflation rate, and into commercial mortgage-backed securities. Insurance companies and pension funds need to earn at least 6 percent to cover their liabilities, Zell said.

A 10 year Treasury note ended at 3.875% today, up 20 basis point from Tuesday. We have seen slight upward movement in the 10 year note, however the rate has dramatically changed from the 5% plus rates last summer.

Sam Zell - Bloomberg Article

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Comments

One Response to “Sam Zell Predicts Commercial Real Estate Resurgence”

  1. Jim on May 11th, 2008 9:34 pm

    After looking at Sam Zell’s trackrecord, I think he know what he is talking about. Great article!

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