Sam Zell at the CCIM Thrive Conference

In Austin Texas, this past October 27th-28th, 2015 the CCIM organization held its annual CCIM Conference; this year’s theme: Thrive. The conference featured different panelist to cover all the topics in Commercial Real Estate. From new technology in the business to capital markets. The highlight of the event was key note speaker, Mr. Sam Zell, founder and chairman of Equity Group Investments. Coming fresh from his big sale of 23,000 apartment units to Starwood Capital for $5.4 Billion, he shared some of his views and experience in the commercial real estate market. Here are the highlights of his talk:

- Professional Opportunistic: Sam Zell said that more than lucky, he considers himself a “Professional Opportunistic”. He’s known for recognizing opportunities in down markets, buying properties then selling at the height of the market.

- U.S. economy and the World economy: Sam mentioned that if we think the U.S. is immune to the economic crisis on emerging markets, we should think again. The U.S. is likely to feel the effects of the slowdown in the economies around the world.

- “Where is demand coming from?” “No one can tell” was Sam’s answer to the question. This referring to the state of the economy. Although wages and business expenditure have not increased, the economy seems to be booming and no one seems to know where this demand is coming from.

- “8th inning” When asked in which inning he thinks the economy is in, Sam said 8thinning. The economy is on its 7th year recovery after the financial crisis and it seems to continue its boom. Many people speculate this bull market might be coming an end.

- Education. Sam brought up the topic of education. He feels there is a disconnect between business schools and the business world. Schools are only concentrating in numbers and theories, not teaching skills such as selling, deal making. He sees a disruption in education in the next ten years.

- Capital Markets: Sam sees less liquidity in the capital markets, with an increase in uncertainty. It feels like musical chairs; no one knows when the music (money) is going to stop.

- Demographics in Future Cities: As the demographics changes in the next decade, Sam sees a change in the way people are living. He expects more companies and people to move closer to CBD, away from suburbs. Millennials do not want to drive long distances to work and prefer to be close to entertainment in the city. This will hurt commercial properties in the suburbs as the demand will decrease and vacancies will increase.

At the end of the event, Sam was offered an honorary CCIM membership. He’s a great example to many investors, new and experienced.

The next CCIM convention will be in Georgia. More details on the CCIM website.