The real estate billionaire is selling Equity Office Properties Trust to Blackstone Group for $36 billion. But is he cashing out too early, BusinessWeek.com reports?
Samuel Zell turned himself into a billionaire by snapping up assets that most everyone else had written off. But the founder and chairman of Equity Office Properties Trust has blundered occasionally, too. Just as the dot-com bubble was bursting in early 2001, Zell engineered a $7.1 billion takeover of another real estate investment trust (REIT), Spieker Properties, whose offices crowded such high-tech capitals as San Francisco and San Jose, Calif. Equity Office shares would not recover for four years.
So, when the Chicago company announced on Nov. 19 that it was selling itself to Blackstone Group for $36 billion, including debt, in the biggest leveraged buyout in history, investors began wondering which Sam Zell was doing the dealmaking,the myopic one or the visionary.
If white-collar job growth stalls next year, eroding the value of office buildings, then Zell will have cashed out near the top of the red-hot REIT market, adding to his reputation for seeing trends that others miss. The small premium he accepted for his company,just 8.5% above its Nov. 17 trading price of $44.72 per share,seems to indicate that he was eager to get out.
