Billionaire and famed real estate investor Sam Zell, Founder & Chairman of Equity Group Investments joined Maria Bartiromo for a " CNBC Exclusive" interview on Wednesday.
Zell thinks "we've passed the worst" on the residential side and the evidence is in prices starting to rise even though foreclosures continue. He expects a recovery in the housing sector to continue throughout this year. While there have been many comparisons made between the residential and the commercial real estate market. Zell said "the housing sector was pushed way out of line and there's no comparison to the extent to which the housing market was over-expanded vs. the commercial real estate market." Perhaps an even bolder comment, Zell said that once the dust settled, "we're going to find that fraud played a very major, major role in the housing side."
Betting on Brazil
For Zell however, the real opportunities lie outside the U.S.
He said "Brazil represents a very unique set of circumstances, it's politically stable, it's energy self-sufficient, it's got a growing population, it's an educated population and consequently, it's now, for the first time beginning to kind of step out." Zell's property investments in South America's largest economy include, the largest shopping center owner BR Malls and the largest homebuilder Gafisa. In the past month, Zell's Equity Investments added to its Brazilian portfolio, by investing an 8.5% stake in Brazil Finance & Real Estate, a real estate finance company.
Zell's focus right now is on homebuilders, as he says "they represent the first step up from lower to middle" and that "there's a great desire among the governments (of emerging economies) to go in that direction."
Future of Tribune
Zell is no stranger to risky investments and his investment in newspaper publisher Tribune Co. back in 2007 has been considered his boldest move. The owner of the Chicago Tribune and the Los Angeles Times filed for Chapter 11 bankruptcy protection last year and is currently in the process of realigning its businesses. Of Tribune's future, Zell said that he is "very optimistic" but was unsure when the company would emerge from bankruptcy protection. He added that it was "reasonable to assume that I'll come out probably in the first half of this year". However, Zell said there was a chance that could happen "as soon as the end of Q1."
Liza Tan contributed to this article.
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