Bone-Chilling “Plateau” in Apartment Boom Resurfaces, Smartest Money Bails Out

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Bone-Chilling “Plateau” in Apartment Boom Resurfaces, Smartest Money Bails Out
by Wolf Richter • December 17, 2015


[font color="blue"]Last time a “plateau” was declared, the market crashed.[/font]

Legendary real-estate bottom-and-top picker Sam Zell, chairman of apartment mega-landlord Equity Residential, got on Bloomberg TV and said, “There is a high probability that we are looking at a recession in the next 12 months.”

This is not even a remote possibility in the Fed’s miserably slow-growth forecasts it issued yesterday. But Zell was once again having a will of his own. He offered a laundry list of reasons: Multinationals are announcing mass-layoffs; global trade is deteriorating; China’s economy might be spiraling down; and “the strong dollar” is hitting US production.

But he said this only after he’d unloaded a ton of commercial real estate: in total 23,262 apartments in five states. The deal was announced at the end of October. Another 4,728 apartments are to be dumped next year.

As his firm pocketed the $5.4 billion it got from Starwood Capital Group for these units, Zell said: With “pricing currently available in the commercial real estate market, it is very hard not to be a seller.” ...............(more)

http://wolfstreet.com/2015/12/17/bone-chilling-term-plateau-in-apartment-boom-resurfaces-smartest-money-bails-out/