Zell: Foreign Soil To Be Next Beachhead

Zell pegged Q1 2009 as the probable turning point for the seven year wave the industry has been riding. He sited the new administration that will take power at that time and the uncertainty of certain economic factors as the reasons behind his forecast. To not feel the negative impact of the downturn, Zell suggested companies should look abroad. "The US market is great but it is a mature market," he said. "Around the rest of the world growth is unbridled."

"The opportunities across the world are truly extraordinary and they all emanate from here," he said, calling foreign locations the next beachhead for the industry. "There is tremendous opportunity to invest in growth around the world."

Compared to the rest of the global markets, the US is a mature industry when it comes to real estate. Zell said that in 1993 only four other countries had established REIT like structures. Today 30 countries have such structures in place. "The creation of the modern REIT era in the US has acted as a model for the rest of the world," he said.

By exporting our skills, our know-how, our talent from the US's industry to foreign countries, Zell said companies will benefit immensely. Industry personalities across the globe are trying to figure out how to create greater liquidity, which is something the US real estate professionals can bring to the table. "There is enormous value in transparency, to eliminating the hocus pocus," Zell said. "And liquidity equals value. We are disseminating that liquidity all over the world."

As an example, Zell sited the great need for housing, especially affordable housing, in Mexico and Brazil. He said the need is going greatly unmet despite the thousands of units that came to the market last year. "Broaden your horizons," he said. "Understand what we've created keeps creating ripple throughout the world."