I didn’t know where I was headed, but, as always, I was very eager to get there. - Sam Zell

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.

In emerging markets, a big clue to national stability is whether a country is on the verge of investment-grade rating. Early on, I came to the conclusion there’s no other time in the life of any country when it’s more disciplined and more transparent than when it’s a year or two away from reaching investment-grade status.

I knew what the Equity Office portfolio was worth. And I knew we were undervalued by Wall Street. Every quarter, the management team would do an in-depth analysis of every asset in the portfolio to develop a real-time valuation. The most reliable measure of our buildings’ value remained — and had always been, in my opinion — replacement cost. Replacement cost mattered more to me than rents or comparable prices or vacancies or economic growth or stock price. This was because replacement cost determined the price of future competition.