Submitted by Taps Coogan on the 6th of February 2019 to The Sounding Line.

Sam Zell, businessman, real-estate mogul, and Chairman of Equity Group Investments, recently spoke with Bloomberg about the decreasing liquidity he is witnessing in real-estate markets.

 

Sam Sell:

“I think that overall liquidity has decreased significantly… (In the case of Commonwealth) we’ve liquidated, over the last four years, about 135 properties. Four years ago, if we put a property for sale there were 20 buyers and 15 of them were real. Last year there were three buyers and we hoped one of them (was) real. So, you are seeing a lot less liquidity, a lot less appetite for risk. Maybe people are responding to pricing, which is still pretty high both in private equity and in real-estate.”

“… we’ve just come through the greatest increase in liquidity anybody has ever seen and quantitative easing was certainly a major factor in creating that. So, you know, going back down the other side of the curve is frankly healthy and expected. Second of all, we’ve had… significant price increases in all asset classes, including the stock market and real-estate. It’s not unusual that it’s followed by periods of adjustment and I think that’s what we are in right now. Obviously, the Fed is taking liquidity out of the system… That has an impact, but generally I don’t think, at the moment, we have any liquidity crisis at all… You’ve got to gauge everything in the context of how much liquidity there was. When QET was cooking, nobody had ever seen that much liquidity. So we’ve now gotten closer to normal but we are still on the sloshy side of normal.”

There is more to the interview, so enjoy it above.

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