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Sam Zell Is Selling More Than Property After Real Estate Warning

Zell said in April that the real estate cycle was in its 11th inning. His Equity Group Investments is about to exit its fifth company, hospital operator Ardent Health Partners.

(Bloomberg)—Sam Zell is increasingly looking for the exits outside of his real-estate empire.

The billionaire’s Equity Group Investments has sold or plans to sell stakes in at least four companies since October 2017, according to data compiled by Bloomberg. In the same period, Chicago-based EGI has announced one new investment.

A fifth exit may be on the horizon. Ardent Health Partners, a hospital operating company Zell’s firm bought in 2015, is preparing for a public offering, according to people with knowledge of the matter. A spokeswoman for EGI declined to comment on the transaction and the pace of the firm’s selling. The company is “always evaluating strategic opportunities with respect to our investments," EGI said in a statement.

Zell, 77, who’s described himself as a net seller of real estate since at least 2015, said in April the industry was in the eleventh inning ahead of a “tsunami of supply." Equity Residential, the real estate investment trust where Zell is chairman, has sold $8.5 billion of properties since the start of 2015, according to a company presentation.

He’s been more tight-lipped about his other assets, which include energy, transportation and infrastructure companies, with some of the holdings going back decades. The Bloomberg Billionaires Index pegs his wealth at $4.4 billion.

Excessive Capital

“At the moment we don’t see enormous opportunity," Zell told Bloomberg TV in March. “Pricing today, primarily because of the supply-demand scenario in terms of capital, is distorting all markets, and there’s too much capital chasing too little opportunity."

The son of Polish immigrants, Zell got a law degree in 1966 but was more excited with his off-campus student housing investments than his studies. He founded EGI two years after graduation, which started out buying real estate and later added distressed companies.

After the property market tumbled in the early 1990s, Zell reconfigured much of his investing into publicly traded REITs. He sold Equity Office Properties to Blackstone Group LP for $39 billion in 2007, the biggest leveraged buyout at the time and right before the real estate market tanked.

In the same year, he purchased Tribune Company, owner of the Chicago Tribune and Los Angeles Times newspapers, for $8.3 billion. The media giant ultimately went into bankruptcy, costing Zell more than $300 million.

Asked where he was putting his money in a January CNBC interview, he said he was “primarily keeping it in cash where possible." Equity Commonwealth, a REIT that Zell chairs, had about $2.7 billion in cash and equivalents at the end of last quarter.

--With assistance from Paris Wald.To contact the reporter on this story: Simone Foxman in New York at [email protected] To contact the editors responsible for this story: Pierre Paulden at [email protected] Steven Crabill

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