One hot topic, of course, was the sale of Equity OfficeProperties Trust by Zell to Blackstone for $36 billion in a cashstock deal, over a higher bid that had strings by a joint venturethat included Vornado, Starwood and locally based Walton Street.Starwood and Walton dropped out when the bidding warintensified.

Zell defended the sale, saying he received a "godfather offer,"meaning that the deal was better than the company had believed thestock was worth at the time. He said Blackstone is getting a 7%profit on sales of hundreds of office properties EOP had owned.Zell said his company would have received about that much byliquidation, but got the same result without having to pay brokerfees.

However, he said the sale, and subsequent mergers andacquisitions by public companies into private entities, are not theharbinger of doom for the REIT firms. "I don't think this the endof the REIT era, rather, it's the reverse," Zell said. "In otherindustries when private companies take over public firms, you don'tsay that's the end of those markets. I thin 75% of those companiesgoing private now will be back public in five years."