Sam Zell believes office sector will recover ahead of retail

Billionaire property investor Sam Zell believes demand for office space will likely rebound from depressed pandemic levels this year, and said it will happen long before the retail sector does the same.

Zell told CNBC there are questions around the viability of everything from “the top mall to the corner grocery anchor mall” within the retail sector.

“I think retail is much more of a falling knife than office, and I think that office is likely to recover much quicker,” he said.

The founder of Equity Group Investments said he believes the office market will rebound quite rapidly once COVID-19 becomes “less of a risk”, though he admits hybrid work policies will become the norm at most companies. He said the exact speed of the recovery in the office sector will depend on thriving industries hiring more workers to come and work in their offices.

“Ultimately, the amount of time people spend in the office is gonna be very much related to the demand for their time,” Zell said.

That said, Zell, whose company has not been putting money into the sector, believes the office market will still have problems to contend with. One of the biggest challenges will be obsolescence, he said, which could make many assets in the space unsaleable without significant investment into them.

“There’s a disparity between office prices and office attractiveness,” he continued. “There’s been relatively little change in pricing. We haven’t had any kind of distressed scenario.

Zell did however, say that dynamic could change as market interest rates tied to bond yields have climbed in recent weeks. He explained that low rates have kept the office market stable until now.

Mike Wheatley

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at

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