YouSaid · the spoken record

Sam Zell

lines on the record: 123
first: 2020-01-23
most recent: 2020-01-23
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Well, it's my pleasure and it's very fulfilling to think that people will listen to this conversation and will reach their own conclusions and find what parts of it resonate with them. And if I've created that kind of an opportunity, then the time spent is very, very, very cheap.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Hope that's the case, but I'm not sure that is the case, and I'm not sure that the perpetuation of standards in universities or in the workplace is not changing our society in a way that ultimately is going to be deleterious to the future and to the opportunity for our children and our grandchildren.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think maybe the best way to describe it to you is that I've been very focused on freedom of speech. I'm very, very concerned about America is truly unique. America is like no other country in the world. I've been the beneficiary of that. And the challenge that I have and the thing that I worry about most is can we keep America capable of providing unique opportunities for people to test their limits and excel? And freedom of speech is one of the most important things. I think that I've been very concerned about what's going on in the college campuses, what's going on in business where politically correct is the standard that in effect I think challenges the freedom that has made this country a great. And so that's probably the single biggest issue that concerns me. More than anything else.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“But financial challenge is not the ultimate answer. The ultimate answer is can you maximize what skills or genes or understandings you have and make a difference? That's what we're on this earth for and that's what our responsibility is. And I as a parent am responsible to inculcate my children with that. And hopefully what I've done financially and otherwise gives them the freedom to truly excel at whatever turns them on.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“I guess no matter what you say, I think it comes down to can you inspire your children? Can you encourage your children to excel? My message to my children has always been go for greatness. I never fantasized of any of my children working for me if it turned out that one of my children had the talents necessary, that'd be great. But what I really communicated to them over and over and over again is find what makes you happy. Find the challenge and then excel at it. Be the best you can at who you are and with the talents that God has given you. That's the message that I've given to my children over and over and over again. Yes, I've been very successful and yes, they're going to have less challenge financially than I did.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think that there's little doubt that all of the countries of the world are much more connected today than they ever have been. Obviously, the two biggest by definition are much more connected. I don't think that we can ignore China's existence, nor do I think China can ignore our existence. And one way or another, we have to find a middle ground where China can continue to prosper and grow, but not in the mercantilistic force, I mean, like identifying five industries, they're going to pour capital into to take over AI and stuff like that. We can't afford to let that happen.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Well, I guess you got to start by the fact that I think that China has been taking advantage of the United States for 20 years. I think when China was admitted into the WTO, there was an assumption that by virtue of them being admitted into the WTO, that they were going to behave differently. The reality is they behaved as every mercantilist since the beginning of time, and we have not had the what I'll call independence or clearness of thought to understand what was going on. And only now are we, frankly, out of necessity creating the kind of environment that challenges China and in effect says to them, you can't continue to take advantage of us. And if you do, we're going to change the terms of the game.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Well, that's one way to look at it, but I think another way to look at it is it's having a fire department who figures that the best way to solve, to mitigate the risk, is to wet everything down before the fire begins.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“even for longer because in effect the central banks don't have the tools with which to defend themselves therefore they have to keep the process benign and as you see here we are in what's supposed to be the eighth or the ninth inning and instead of the Fed raising rates they're lowering rates”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“But if you were in the real estate business, the real estate business was really terrible in January of 10 and January of 11 and January of 12 and only started beginning to get better in 13 and 14. So what inning are we in? When did it start? And I think the same thing is true of a lot of other things. So I guess what I would tell you is I think that the environment is benign, not aggressive, not pessimistic. I think that our whole system is based on or built on growth. And we are in a period of substandard growth and substandard growth, I think, is also recessionary in effect defers recessions. So I think it's very likely that we will continue to bounce along till the beginning of 21.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“So therefore, I think that with the amount of debt being created, that's even more the case today. So I think that number one, I think we're probably, I don't think we're in a bullish environment, despite the fact that stock market today is at an all-time high. I don't think it's the same kind of an all-time high as it has been in other, quote, frothy periods. I think we've pretty much come to the conclusion that growth is limited. And I think growth is limited, but I think growth is going to continue to be positive. I'm very sensitive to the question which I get all the time about what inning are we in. But I also think that people aren't focused on what I think is even more important question. When did the game start? So in the stock market, it was January or February of 2009.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Well, when all is said and done, you have to think from the perspective of what I call pure logic. For twenty five years, and people ask me about interest rates, for 25 years, the United States, the risk-free rate of return was 5.6%. If the risk-free rate today was five point six percent, the country would be broke, as with the rest of the world. So you start with the assumption that the world we live in creates a set of limitations. I think one of those limitations today is that nobody can afford for interest rates to go up.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“And that's exactly what I've done. I mean, I've spent my whole life. I've loved everything I've done. I've loved getting up in the morning. I never found myself getting up in the morning and saying, oh my God, I got to go do this again. And I've tried very hard to focus my life on never doing anything I don't want to do and never being any place I don't want to be.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“I'm not criticizing it at all. I'm saying that it's a burden. I mean, it'd be so much easier if I didn't know so much. Then I could just say, hey, everybody's buying the Fang stocks, you know, jump on the bandwagon. But that's just not the way I think. And I've spent my whole life trying to separate what other people think is cool. And what I know is something different.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Now the origins of that sentence we suffer from knowing the numbers really reflects the fact that there have been numerous times in my career when everybody else was doing stuff. And I wanted to do it too, except I knew too much. It was too knowledgeable. And so if I didn't know as much, then I could make the same mistakes they were. But by virtue of knowing the numbers, it became the disciplinary factor that kept me from making a mistake and becoming part of conventional wisdom instead of an independent thinking.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“And I want to go see it. And he said, tell me, and I'll set it up for you. So we flew into the jungle where there was an airport literally built into the jungle just to serve the mine. And we went up to the mine and saw stuff that I'll never forget. So it's curiosity. It can't be an entrepreneur. It can't be a risk taker unless you're also just ape about knowledge and you just got to keep absorbing and separating out that which is relevant and that which isn't it's very easy to get overcome by too much information and therefore you can't make decisions. So you've got to be able to sort it out.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Yes. I don't take vacations. As a matter of fact, that word is kind of foreign to me. I've never been one to sit on a beach. I don't know how to do that. I just want to see stuff. And one of the great stories that my wife and I talk about is that we went to Syria right before Syria came apart. And we went to Damascus and we went up into the various parts of Syria. And we had one day that we just didn't have enough time. And so we said, well, we'll go to Aleppo next time. And in between, of course, Aleppo was destroyed. So that only motivates me more to constantly see stuff. And one of my great stories was I saw this video of the biggest copper mine in the world and they're in Jawa. It was run by a company called Freeport MacMoran out of New Orleans. And I ended up at a conference sitting next to the CEO and I said, I just read about this incredible model.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“At it and see what's there. That's kind of the way I attack and look at all kinds of information. You can't be an entrepreneur unless you're really curious. You got to see the problems. You got to see the solutions and you can't see them from afar. You got to see them up front. That's why I end up traveling a thousand hours a year on my plane. The typical CEO of a Fortune 100 company travels 250 hours a year. But I got to see everything. And when I'm making risk decisions and I'm making decisions on partners, I want to see them in their home territory. Almost anybody will come see me if I invite them. But that doesn't do me anything. It's also particularly relevant that if you go see them, you can decide when to leave.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“I don't remember anything else about the book. I don't remember anything other than the shootout at the end. But the only thing that was relevant in the book to me in the future was the airport and the resort. Everything else was superfluous. But it's that kind of segmentation and absorption that I think contributes to the decision making that I'm constantly making. I'm constantly adding and increasing my knowledge of everything in every direction I can. I mean, a number of years ago, I went to Ulan Bator. Why would I go to Ulaan Bator? Well, Ulan Bator happens to be the capital of Mongolia. And I had read someplace that they had opened Gucci store and another high-end reach out store in Ulaanbaatur. And I said, why would they do that? And it turned out that the country was in a giant resource boom. And so I said, we've got to go.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“That didn't make a lot of sense. And so we're trying to figure out well, geez, could we stop someplace on the way from Chile to Chicago and where could we stop? And then I remembered that I'd read this protagonist escapist book where the final scene was a shootout on a golf course on an island in the Caribbean. And that this golf course was part of a resort that had an international airport inside the resort. And we ended up coming up in the name of the airport and the name of the resort and we ended up landing there and spending the night and then coming back to Chicago at 4 o'clock the next afternoon. But that was relative. Somehow or other, the only thing about the story that I could remember was this unique scenario of an international airport inside of a resort.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“I don't remember who the protagonist was. I don't remember anything. But if there was a description of Berlin, I remember the description of Berlin because that, in effect, has potential relevance going forward. And so somehow or other, I'm able to get rid of the what I'd call the non-relevant information, create stories, was very entertaining while it happened, but it's not relevant to tomorrow. And somehow I'm able to hang on to and use that kind of unique information. So one of the stories that's applicable this is I was on a motorcycle trip in Chile and last day it rained like crazy and we were we cut the trip short by a day and we started coming home early and I realized that we were going to get home at three o'clock in the morning and”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“I read and I read and I read and I read I'm never without something that I'm reading. I read five newspapers a day. I read three magazines a week. I listen. I'm trying to observe. I'm trying to figure out. And when I think about it, I think about the fact that I have some kind of a unique capability to sift through volumes of information and only remember the parts that are relevant. I mean, I read maybe one and a half books every two weeks and most of them are escapist novels. And when I read them, it's Grisham. It's Baldacci, it's whatever it is, it's just, I'm very involved. I love reading them. And the day after I finish them, I can't remember anything about him.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“That people had just thought that it was just so easy, and let's just, and it all the idea for that year's gift had come when somebody said to me, you know, you must really be pissed off. You spent all those years becoming a billionaire and these people became a billionaire overnight. And I said, when it turns to cash, call me.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“The answer is a lot. We ended up doing a lot of these very complicated automatons and we ended up getting a group in California that did the models for Star Wars movie to start doing these year-end gifts for me. Probably took about six months. The good news was we produced really exciting products. The bad news was that I was basically making a prediction where my head was at six months before it was delivered. History turns out that I was pretty good at that. I mean, probably the most significant example of that was December 31st, 1999. I sent out a piece that was basically calling an end to the dot-com boom. And it was basically the emperor has no clothes. And the song was Paul Simon's 50 Ways to Make a Billion. I basically made fun of the idea.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“The idea of me sending out a calendar with my name on it or a pen or a pencil, I just, it's just crazy, but that wasn't who I was. And so I decided that what I was going to do was I was going to send out to people some memento of where my head was at that particular year. And so the first year I sent out just a simple block with a SAMISM on it, which was we suffer from knowing the numbers. Every year I kept coming up with something different that reflected where my head was at or where I thought we were going or what I thought was happening. And then when you do something for a very long period of time, it tends to get out of hand. And so by 1994, the idea was, well, let's do a music box. And so we did a little automaton with a music box and it happened to be VG's song, but basically talking about where we were.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think you got to go back to 1976. I've been in business for give or take, I don't know, eight years, and I'd started getting chocolates and grapefruits and all kinds of Christmas things, pens, pencils. And I felt motivated and felt that I had to somehow or other respond to all these people sending me this stuff.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Still works for me, and she doesn't do any holy roller stuff. But in effect, that experience is very relevant to what she does and her almacinary activities and other things, which is wonderful.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Well, I mean, the answer is, in the end, nothing is more important than, in effect, facilitating people to test their limits, reach their goals. And she sat down with me and said, I'm at a stage in my life where I really need to change how I'm thinking. And although I didn't necessarily envy her or want to go to divinity school myself, I said, well, if that's what you want to do, then how can we arrange your work schedule so you can go to Divinity School, get a degree, and still stay relevant in the business world? And that's what we did.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Favorite words is the enemy is without. In other words, we did a little drawing of a bunch of wagon trains circled. And the point being that the enemy is on the outside, not inside. Supposedly Abe Lincoln created a team of rivals. Well, maybe running a government, you need a team of rivals. I don't know. But when you run a business, you don't need a team of rivals. You need a team of partners who are rivals to the outside. And that's always been a critical part of the way we think and the way we operate.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“How do you do it? I don't know. It just kind of happened to me. But when I look around in my own world, I can't help but say that one of the key things that has separated and distinguished me from other people is that I have always been accessible. In other words, I make a joke of the fact that I've had the same office for 30-some-odd years and only four years ago did I discover there was a door on the office because I'd never closed the door. So that means that I was available to everybody. And by virtue of being able to be accessible to everybody, I'm in effect lowering the overall risk because there's no excuse if Sam's available in the same manner. I've never had much of a hierarchical structure. Never even thought of it that way. Everybody wears the same thing to the work every day and there's no secrets. And one of my...”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Don't leave. We have a long history of, even if you went to my world today, you'd be shocked at how many people have been there for 20 and 30 years. And obviously I take great pride in the fact that they have had the confidence level to stay with me all these years. And in many cases, in different roles. I mean, in other words, that's also been part of it. I'm really focused on the individual and his or her capabilities. And if I have trust in somebody and I have confidence in somebody, I'm just as comfortable having them do business A or business B because I think in the end the success or failure is really a function of how good a businessman you are, how good you are making judgments and that's what separates the men from the boys. So creating this long-term loyalty and connectivity is very important.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Well, I mean, to me, that's not a principle. That's just basic logic. I mean, if I'm depending on you to perform and you aren't at risk, I'm a fool. So every single thing I've ever done, including when I first started in business, from the first day, everybody who was in a decision-making position in my firms always had a piece of the action. And that piece of the action required an investment. Now, it might be a very small investment, but relative to their net worth, it was meaningful and they had skin in the game.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“I mean, that's why, although we have been agnostic and we've been in 25 different or 30 or 50 different businesses, but the standard is always been, if I can't run it, then I don't want to own it. And so we don't do rocket engines. We don't do biotech. Because if proverbial hit the fan, I could always step in and there have been numerous examples over the years where I've had to step in and take over and temporarily make something work. But if I can't do that, then that's above my pay grade. I'm disciplined enough not to get involved in things that I couldn't run if I had to.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“I mean, the question that I keep asking people about WeWork was just tell me that cash flows that we work generate, what do they come from? Do they come from profits in other businesses? Or do they come from venture capital, which in effect doesn't have the discipline of profitability? And the answer was obvious. And it still is today. And by the way, when it's all said and done, any company that doesn't have a barrier to entry is vulnerable in any business. Just look at how many competitors we work as fawn. Now, most of them have been spawned because we work sold as technology concept, but the reality is that they're creating new WeWorks all the time, just calling them different things.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Just think about it. What was WeWorks competition? It was this plug at Starbucks. In other words, the guy came and he occupied a desk from you, but if things got tough, he went back to Starbucks and plugged his computer into the wall and he was in the co-working space.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“First, one to feel the impact. So the idea that we work with some kind of technology company, I didn't understand that unless maybe they came up with a special way to underwrite beer or something, but it was basically a giant promotional effort. You know, it was just the Enron of real estate.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Well, I mean, my first exposure to the WeWork model, which is basically leasing an office floor for 15 years and then breaking it up and then leasing it to small users at higher rates. The first example of that was a guy named Paul Fijian in the late 50s. In the late 50s and early 60s, no new office building existed without a floor or two least to Fijian. And then supply became much more prevalent and he went broke. And then somebody else did it again and they went broke. And eventually even today the largest co-working company in the world called Regis, they went broke. Why? Because if you're the marginal supplier when things are good, everybody uses you. And when things start to soften, you're the”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“And in effect, the equity is very small. So if you make some significant improvements, the impact on a very small amount of equity is pretty gargantuous.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Sure, a leverage buyout in effect is taking a company, whereas a normal company would have, let's say, 30% leverage, you buy it by, in effect, creating 70 or 75% leverage, and you make a whole series of, quote, immediate improvements that improve the cash flow and quote, create the opportunity to make a lot of money going forward.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Historically, that has been the case, mostly because that oversupply is usually a function of too much capital availability and not enough discipline. So in effect, although it may end up creating oversupplies in real estate, it inevitably creates problems in other forms of finance as well. So in 1989 when we had that massive oversupply of real estate, we also had the beginning of the LBOs. And then the LBOs started they were very conservatively financed by the time five or six years had gone by, they were very aggressively financed.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Within five years. So if you could make a case that it was recoverable within five years, you didn't have to take a write off. By the time we got to 1990, the game had changed and you in effect had to take a write-off based on the discounted cash flow. And so in effect, coming up with a deal for a dollar down and a hope certificate and giving them a long dated note, you didn't have to mark the note to market, created a very different environment. So in 1973, the name of the game was make the transaction happen. By 1990, the name of the game was you had to be able to discount it out. And so therefore, in 1973, I didn't need a lot of cash. I raised the fund because I realized the only way I was going to be able to take advantage of this enormous market opportunity was by basically paying cash and buying stuff at 20 and 30 and 40 cents on the dollar.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“But remember, all of the previous crashes were precipitated by rising interest rates. So 73, I mean, interest rates went as high and 73 is 12%, which was just unbelievable at the time. So the cost to carry to a lender in terms of taking back a property was very high. So they bit the bullet. We also up until 1990, the real estate business had a very different accounting treatment. If in 1975 and from 73 to 75 or 77, I probably bought more real estate than anybody in the United States. All of it was bought $1 down in a hope certificate because I'd go to the insurance company and at that time the definition of taking a hit was a scenario that was quote unquote not recoverable.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“When interest rates were going down. So, whereas in the past, when there were oversupplies, there was an enormous incentive on the part of the lenders to get rid of it at any cost. In 208, the cost of carry was going down, therefore, the motivation to get rid of it was much less, and the lenders were willing to take less hits. Therefore, the opportunities as a distressed buyer in 08 and 09 were nowhere near as attractive as they had been in the other cycles.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Well, the 208 crisis was the first recession since World War two where real estate was not in oversupply at the beginning. That's really. The truth of the matter is the oversupply was in single family houses. But that's a different class than commercial real estate. But commercial real estate, although it wasn't great in 207, although I sold equity office at 207, but by the time 208 came, it was softening, but it wasn't an oversupply. Every other recession, 73, 81, 89, all of them were real estate recessions triggered by oversupply. So that made 208 very different than all the rest of them. It also meant that this also occurred at a time”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“In their book of business? That's correct. They own the stocks and they own bonds. And that was it. And there were a couple of really far out investors who had some real estate. But there was a very famous study by Ibidson, IBBO, T-S-E-N, that in 1992 reached the startling conclusion that real estate was a separate asset class. But prior to that, so here's this guy coming in and worse than that. He didn't even wear a suit and tie. And he's pitching us on the fact that the end of the world is coming and get ready and be prepared and be part of a fund. And that first fund was unbelievably difficult to raise. And then the rest of them were very simple.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Here's the oversupply, here's the this, here's the that. And they looked at me and said, wait a minute, what are you talking about? We just heard from our MAIR appraiser that our portfolio has gone up in value. I said, that's BS. That's not ever happened. Look at the numbers. Look at what the numbers are telling you and look at where tomorrow's numbers are. I remember giving a speech at that time and talking about the fact that the missing element was we didn't have enough tenants for all the occupancy that we were creating.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I guess all I can remember about that period was that this was the 80s when the Japanese invaded the US market. The Japanese came here and made the ultimate classic mistakes that all kinds of investors have made coming to the United States. And that is what works in my home market obviously works somewhere else in a different market. The Japanese had flooded the market with capital, occupancy revels across the country in every form of real estate were down. Supply was way out of whack. And it wasn't very hard to predict that this was the end of the world in terms of real estate. And I remember vividly when I started raising money for the first real estate opportunity fund in 1989, I was confronted with the challenge where I walked in and sat down with an insurance company or a pension fund and I said, the end of the world is coming.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Where is to morrow? And how can I identify where tomorrow is going, and how can I position myself to take advantage of that? And that article led me to lead the whole conversion of the real estate industry to the real estate investment trust industry and create liquidity. In that speech in October of 1993, I predicted that we would be $250 billion in 10 years and well on our way to a trillion and everybody thought I was truly insane.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“This is 88. I sat around trying to figure out the title for the article, and I ended up coming to a conclusion that the riot title for the article was from Cassandra with love. Now, Cassandra was this lady in Troy who was cursed by the gods by making true predictions that nobody would believe. And I then sat down and wrote out an article that basically predicted what was going to happen to the real estate industry and what the future was. True to form of Cassandra, nobody believed me. Everybody said, oh, Sam the pessimist again. He's trying to discourage other people so he can have more of the market. I mean, just all kinds of non-recognition or non-willingness to accept what to me was simple logic. But it reflected what has been a kind of a hallmark of my career, and that is my ability to sit down and think through.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT
“Because all the action was on the private side. And I basically said, I remember in that speech, I said, I was driving around Houston in 1984 and I saw a bumper sticker and the bumper sticker said, Please, God, give us one more oil boom. I promise we won't screw it up this time. That's where the real estate industry was in 1993. And we had an extraordinary opportunity to take this and make it into something really significant. But we had to be, in effect, custodians of the public's trust as opposed to them that took advantage of the public's trust.”
2020-01-23 · The Tim Ferriss Show · #407: Sam Zell — Strategies for High-Stakes Investing and Dealmaking · IDENTIFIED FROM THE TRANSCRIPT