Sam Zell, the billionaire investor known for his penchant for buying distressed properties, died at home today at 81 due to complications from a recent illness, according to a news release from his main company, Equity Residential (EQR).
He is best known for his role in creating the modern Real Estate Investment Trust (REIT), which is now a $4 trillion asset strategy.
Born Schmuel Zielonka in Chicago on Sept. 28, 1941, Zell entered the real estate business while attending the University of Michigan; by the time he graduated with a Law degree in 1966, his student apartment rental venture was netting $150,000, according to his Forbes profile, which currently lists him as the world’s 523rd richest person with a net worth of $5.2 billion.
After acquiring some buildings in Toledo, Ohio, and Reno, Nev., with backing from a senior partner at the law firm he worked at for a week before deciding law was not his calling, Zell founded Equity Finance and Management Company — the predecessor to EQR — in 1968.
Zell ran the company is partnership with Robert H. Lurie until the latter’s death in 1990. Zell began acquiring a large portfolio of properties that Starwood Capital Group had amassed by way of government auctions after the savings and loan crisis. By the end of the decade, Equity Residential had acquired Wellsford Residential Property Trust, Lexford Residential Trust and a 5,774-apartment portfolio from Lincoln Property Company, assuming nearly $1.5 billion of debt along the way.
Zell launched what became some of the largest and most successful REITs in history: EQR, one of the largest apartment REITs; Equity LifeStyle Properties (ELS), a manufactured home community and resort REIT; and Equity Office Properties Trust (EOP), which was the largest office building owner in the country and the first REIT in the S&P 500 when it was sold in 1997 for $39 billion in the largest leveraged buyout in history at that time.
EQR, which was added to the S&P 500 in 2001, pegged its worth at $31 billion on today’s news release; the National Multifamily Housing Council lists it as the 5th largest owner of apartments and the 14th largest apartment property manager in the U.S.
Zell also made a splash in other industries, most notably with his take-private acquisition of the Tribune Company in 2007. The acquisition loaded the company with billions in debt, drove it into bankruptcy a year later, and earned Zell enmity from media insiders, who claimed he gutted The Chicago Tribune, Los Angeles Times and other major newspapers and only sought to profit from selling the company’s real estate assets, including his hometown landmarks Tribune Tower and Wrigley Field.
In recent months Zell took on a bearish tone, faulting the Federal Reserve’s moves to combat inflation and warning of a looming recession in several interviews.
