Zell: ‘Do We Want to Own This?’

“The rest of the world ain’t doing so terrific,” Zell said at Wednesday’s REIT symposium. (Photo courtesy of reit.com)

NEW YORK CITY—“Over the past 18 months, we looked at each asset and ask, ‘Do we want to own this?’ Or, more to the point, Sam Zell might have added, “Do we want to continue owning this?” Among the godfathers of the modern REIT era, Zell has been a firm believer in portfolio rationalization for most of that era.

Zell asked that question in the context of describing  his organization’s takeover of what was formerly CommonWealth REIT, but it could also apply more generally. “About 18 months ago we took over Equity Commonwealth, and we started with a very simple premise: any day you’re not selling, you’re buying,” Zell told the audience at the NYU Schack Institute of Real Estate’s 21st Annual REIT Symposium, held Wednesday at the Pierre Hotel. “We looked at Equity Commonwealth’s portfolio and concluded that a significant portion of its assets were assets we just didn’t want to own.” About half that portfolio has since been sold, he added, and he later noted that potential acquisitions similarly are evaluated on an asset-by-asset basis.