Sam Zell, real estate investor known for his self-made fortune and colorful language, died today (May 18) at age 81. The news was announced by Zell’s company Equity Residential, which did not provide further details on his death.
Born in Chicago as the son of Polish refugees, he first began a business managing student rental apartments while studying at the University of Michigan. Zell later went on to amass a net worth of $5.9 billion through his purchases of distressed commercial properties and popularization of real-estate investment trusts.
The founder of Chicago-based firm Equity Group Investments, he invested in industries ranging from retail to healthcare and energy, in addition to co-founding real estate investment trusts like Equity Residential, Equity Lifestyle and Equity Commonwealth. In 2006, he sold Equity Office to Blackstone for $36 million, the largest-ever leveraged buyout at the time. He later acquired the Tribune Company, owner of The Chicago Tribune, Los Angeles Times and other media assets, through an $8.2 billion deal, although the conglomerate filed for bankruptcy shortly afterwards.
An active proponent of the arts and education, Zell made donations to institutions like Chicago’s Symphony Orchestra and Museum of Contemporary Art. He also established a number of entrepreneurial programs at the University of Michigan, Northwestern University, the University of Pennsylvania and Israel’s Riechman University.
Above all, Zell was known for his blunt and “salty” manner of speaking.
Sam Zell’s saltiest moments, as chronicled by Observer
Zell of a Pitch: ‘We’re Gonna Give it to ‘Em’
When the subject turned to the advertising market, Mr. Zell asked, “What ad market?” Mr. Quintanilla clarified that he meant newspaper advertisers, which prompted the outspoken Mr. Zell to bark, “I’m trying to find one of ’em!”
Jonathan Gray, Blackstone’s Real Estate Wizard Behind the Curtain
In February 2007, Sam Zell told Jonathan Gray to buy a motorcycle. Mr. Gray, head of the real estate division at private equity powerhouse Blackstone Group, had just closed on the purchase of Mr. Zell’s Equity Office Properties … Yet Mr. Zell was not proposing that Mr. Gray start a new hobby. The motorcycle was meant to be a media totem. “You have to take up motorcycles or something,” Mr. Zell told him, according to a person present. “I ride motorcycles, so they start every story with me riding a motorcycle. You need to find a hook.”
At the Library, Sam Zell on Marriage, Barney Frank and the Tribune Company
On Barney Frank and the housing bubble: “We had Barney Frank, you know, parading back and forth in Washington. He said ‘Let’s keep dancing, let’s put out more subprime loans.’ And then when the shit hit the fan, Barney wasn’t there anymore. That kind of lack of responsibility permeates the whole housing market.”
On delayed marriages: “I graduated college, and I was married 10 days later. I’m not saying it was a good idea [big laughter from the crowd]. Within a year, 95 percent of everyone I went to college with was married. Today marriage has been delayed seven-nine years … Now we’ve got to to take all those people out of the market, which is what’s happened. We’re finally realizing that you buy a house when you need a house.”
On referring to Ms. Liu as a “journalist”: “I could call you worse.”
On the Tribune Company: “When you’re dealing with a 160-year-old company, you have a lot of rigid scenarios. The history of monopolies being able to adjust is not a long history of success … I have to question the whole newspaper approach because so much has passed them by while they didn’t do anything.”
‘Grave Dancer’ Takes Manhattan
Sam Zell–the self-proclaimed “grave dancer” with a history of swooping in on the carcasses of struggling businesses–is now picking at the Manhattan real estate market. “I’m your Viagra!” the colorful Mr. Zell told the L.A. Times newsroom shortly after he bought the Tribune Company, which declared bankruptcy in 2008.
Six-Legged Metaphor For Zell Era Removed From Tribune Co. Lobby
Bureaucratic Shuffle is a statue of a grossly porcine businessman in pinstripes and a boozy smile, six fleshy legs coiling below an engorged waist. Until early this week the statue was set prominently in the Nathan Hale Lobby of the Tribune Towers in Chicago, the building that houses Sam Zell’s media conglomerate. It was intended as a warning, a reminder of everything Zell—who installed the piece upon purchasing the company—did not want his leadership to succumb to.
Sam Zell, Pioneer
Who’s going to build a paywall first? Don’t bet on Sam Zell. “I’m more than willing to let Rupert take the first sword,” Mr. Zell said on CNBC’s Squawk Box today. “And if it works, then I think everybody’s going to follow him, and should have in the first place.”
Asked whether he thought Mr. Murdoch’s plan will work, Mr. Zell replied: “I think there’s a good chance. I think that newspapers do create unique content, particularly locally, that people want to know and want to understand. And if, in fact, the cost of access to that is pennies, it won’t be an impediment to getting it done.”
At Landlord Summit, Grim Prognostication: Commercial Real Estate at ‘Darwinian Point’
“We’ve reached the Darwinian point,” intoned Sam Zell, chairman of Equity International. “I think that the small guys have to die, and the definition of ‘die’ is they’re going to go private.”
Cruel, Cruel Summer
Last Thursday, summer interns at the Courant got a piece of Sam Zell, owner of the Tribune Company, when staffers there gathered around a cake topped with a picture of the man who orchestrated the paper’s recent cutbacks. Both the Courant’s staff and news hole were cut by about 25 percent this summer.
“It was delicious,” said features intern Anne VanderMey. “Half chocolate, half vanilla.”
Black and White, Red All Over: Is 2008 the Worst Year in Modern Newspaper History?
Sam Zell, the brand new owner of the Tribune Company, said: “Unfortunately, I can’t turn this ship from its course of the past 10 years within just a few months.” He added, “But, make no mistake. This is not my ultimate strategy for our company.”
And then Sam Zell threw all that out the window the next day. “What has become clear as we have gotten intimately familiar with the business is that the model for newspapers no longer works,” he said in a memo.
Is the Zell Way Not So Bad?
A former executive at Gannett, Allen Neuharth, says that Zell is just doing what he has to do. In order to prevent newspapers to go the way of the steel industry in the 1980s, preemptive steps have to be made. “It’s a strategy, basically, of gradually closing down.”
Zell Says Commercial Real Estate A-OK, Except in the Suburbs
“After they get through bashing George Bush, the very next question is, `Where’s my visa?”’ Mr. Zell told Bloomberg News during an interview in New York City. “There is not another environment in the world that matches the U.S. in terms of opportunity, creativity, acceptance of change, acceptance of failure.”