Sam Zell Quotes

There’s a line from an old movie, Wheeler Dealers: “You don’t go wheeling and dealing for the money, you do it for fun. Money’s just a way of keeping score.” And that’s how I see it. I’ve always been much more drawn to the experience.

Conventional wisdom is nothing to me but a reference point.

Don’t depend on people unless you understand their motivations and you are confident that your interests align with theirs.

I figured the deal was as good as done, and I returned to Ann Arbor and identified five houses that were all in the same price range for what I was going to pay for the land, about $32,000 to $34,000. These five houses were beautiful — every one of them was three times better than what Mrs. D lived in. One day I drove her around to see them. She walked through each one but never said a word. I couldn’t get any response at all. At the end of the day, I drove her back home. As we neared the corner by her house, we saw a man swaying and holding onto a lamppost. I pointed him out, and Mrs. D said, “Oh, that’s my brother. He lives with us and visits the bars every night. That’s why I don’t like any of the houses we went to see — because he can’t drive; he has to be within at least eight blocks of the downtown bars because he goes there every night, gets drunk, and then walks home.” That’s what we call the major unknown factor. “No problem,” I said to Mrs. D, for the first of many times.

Opportunity is very often embedded in the imbalance between supply and demand. It could be rising demand against flat or diminishing supply, or flat demand against shrinking supply. When there’s an imbalance, I look at where the two lines will intersect and then determine whether it is cheaper to buy or to build. Usually the answer is in acquisition, which eliminates a lot of the risk inherent in development. I like to invest below replacement cost, thereby creating a competitive advantage.

I’m drawn to emerging markets because of their built-in demand. I’ve always believed in buying into in-place demand rather than trying to create it.

we had always looked at the tax benefits of real estate as what you got for the lack of liquidity.

I’ve always valued long-term relationships, but John Hsieh, the former head of Itel’s container leasing business, taught me that you simply cannot succeed in-country without them. Hsieh had extensive international experience and contacts. He took me under his wing, and we traveled the world meeting Itel’s customers and suppliers — from a cocktail party in Rotterdam with British and German customers to a dinner in Hong Kong with a Chinese shipping company. The deep relationships he had with his customers enlightened me. I learned that the extreme degree to which you rely on strong personal relationships is perhaps the single biggest difference between doing business in the emerging markets and the U.S.

If you’re not aware that you’re not supposed to be able do something, the barriers to doing it are dramatically lessened.

Boards that don’t exercise an ownership approach are complicit in poor-performing companies.

Many large private equity firms were interested in acquiring such strong brands — which is why I initially bowed out. A bidding war virtually guaranteed a higher sales price, so even if I won, I wouldn’t get paid well enough to invest my time and best talent in the company. I don’t like auctions, unless of course I’m running them.

Find the NOLs, add profitable business subsidiaries, and, ultimately, maximize the value of an asset we didn’t pay anything for in the first place.

So I wrote an article titled “From Cassandra, With Love” and it ran in the March 1988 Real Estate Issues. Cassandra was a character in Greek legend cursed by Apollo with the ability to make accurate predictions that no one believed.

I told David, “Go look at every store and its entire inventory, who we would sell it to and what we would get for it, in case the deal goes south.” It was a basic fire-sale analysis — what we’d get in the worst-case scenario if we had to liquidate the company. David came back and said, “We’d get 80 percent of our purchase price back.” So I knew that what we had to lose was 20 percent.

It also opened up new challenges. When you invest in emerging markets, you’re trading the rule of law for growth. If you think you can count on receiving justice in a foreign courtroom, you should think again. So, the first question is always “Who’s your partner?” By that I mean “Who is going to watch your interests on the ground every day?