Almost a year ago Sam Zell was buying distressed assets as the U.S. oil sector was seeing a slowdown. He bought assets in California, Colorado and Texas from companies that were raising cash to stabilize their shrinking cash reserves. Same compared the state of the oil industry in the US to the real estate industry in the early 1990s, where there were empty buildings all over the place and nobody had cash.
Same Zell's fame and $5 billion net worth ultimately originate from his ability to connect the dots in the real estate world, but more importantly his dedication to turning around troubled and distressed properties.
Sam Zell, the billionaire known for buying up troubled real estate, said the coronavirus pandemic will leave the same kind of impact on the economy and society as the Great Depression 80 years ago, with long-lasting changes in human behavior that imperil many business models.
Sam Zell is one of the biggest names in the real estate markets and an early leader in REITS in the United States. Now, he's launching a SPAC to target the industrial sector.
The Leadership Team: Equity Distribution Acquisition Corp will be led by Sam Zell, the founder of Equity Group Investments. Zell has a track record of 50 years founding companies, leading turnarounds, leading industry consolidations, and taking companies public. Zell has sponsored 11 IPOs.
Zell is widely recognized as a founding father of the REIT, according to the filing.
In the 1990s, Zell created three of the largest REITs. Equity Office Properties, which Zell founded in 1997, was sold for $39 billion in 2007. Equity Residential (NYSE: EQR), a multi-family REIT, and Equity LifeStyle Properties (NYSE: ELS), a manufacturer housing REIT, both have founder Zell as the current chairman. Zell also chairs Equity Commonwealth (NYSE: EQC), an office REIT.
SPACs are publicly-traded shell companies with the intention of buying another company or companies. SPACs are called “blank check” companies because to begin with, there is no business. Some of the more popular SPACs recently have been DraftKings, Nikola and Virgin Galactic.
After a SPAC raises money in an IPO, the management group will begin shopping for companies and merges or acquires a company, the publicly-listed SPAC may take on the name of the acquired company, even taking on a new stock ticker in many cases.
The last person to make a SPAC announcement was Billionaire investor Bill Ackman who two months ago sponsored the largest special purpose acquisition company through his Pershing Square Holdings fund.
It appears SPACs are here to stay as more and more companies are going this route...stay tuned as I'm sure Sam Zell's SPAC won't be the last SPAC announcement we here this year.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
