Tags: Zell | real estate | Fed | market

Sam Zell Maintains Cautious View on US Real Estate

Thursday, 12 Sep 2013 08:10 AM

By Dan Weil

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Billionaire real estate investor Sam Zell, who made out like a bandit in the past by snapping up distressed properties, is largely sitting out the current U.S. real estate rally.

He has put little money to work in the real estate market since it crashed five years ago, The Wall Street Journal reports, saying prices are still to high. So he has benefited less than some other investors from the market's recent upturn.

Zell, chairman of Equity International, tells The Journal he has let real estate drop to a 30 percent weighting in his personal investment portfolio from 40 percent about seven years ago.

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Put the World’s Top Financial Minds to Work for You

His investments include bets on natural gas, real estate deals in emerging markets, such as Colombia and India, and a distressed-debt fund, according to The Journal.

As for U.S. real estate, "we're dealing with a world that's dramatically more volatile, and that requires more caution and care than before. I'm not singing 'Kumbaya' like other people," he notes.

"You shouldn't misinterpret caution with inaction," Zell adds.

Zell says things won't look quite so pretty for the real estate market when the Federal Reserve cuts back on its easing. Many economists expect the Fed to announce a tapering of quantitative easing at its policy meeting next week.

When it comes to the housing market, Yale economist Robert Shiller agrees that pain may indeed be coming.

"Especially in the single-family realm, I think that there is a chance that there is weakening," he tells CNBC. "There's all this fear over [Fed] tapering that's a cloud over the housing market now."

Editor’s Note: Put the World’s Top Financial Minds to Work for You

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