[ex-Texan]

I used to work with Mr. Zell's company in Los Angeles. There is a very good reason why he has been selling his office building into the real estate bubble. Frankly, I'm surprised he agreed to comment on the record for this report. Zell is one of the most astute and respected real estate investors in the world. He also keeps very quiet about what he knows. Read More About Real Estate Bubble?

[sharktrager]

I am in the industry, and I do think there are legitimate concerns, but they are not universal.

There are individual markets where things are illogical. I know of one, for example, that has had an occupancy slump for years, but the values are starting to rise as outside investors look for a place to park money they pulled out of markets with an obvious unsustainable growth rate. There seems to be a logical disconnect with these investors.

The good news is, these markets are easy to spot. If you imagine the bastions of blue state thought, look at what markets in red states have similar people, and you avoid those markets, you'll be fine.

Scared Bunny Blog
Not for the timid

[glorgau]

A friend of mine was working on a data warehouse for Zell's company a couple of years back. I'm sure they have it well populated by now and are making business decisions from the data. ;-)

[Sam's Army]

Best practice tip: For alarming parts of an article, put them in bold. For really alarming parts, put them in red.

Oh, you already did that. Never mind.

[Mr. Jeeves]

It was only last year that the Bank of America Center, long the dominant building in San Francisco's financial district, was sold to a group of New York investors for an impressive $825 million.

Now the 52-story reddish-brown granite tower is said to be going on the market again. This time, the sellers are hoping that the price will reach as high as $1.25 billion.

The B of A building (which I am looking at right now out my office window) hasn't been full since B of A was bought and Robertson Stephens ceased to exist...not sure why the 50% price premium in one year other than mad speculation.

[mac_truck]

Commercial real estate is awash with capital, and many buyers are accepting initial returns of 5 percent or even less because they have few investment alternatives. Once interest rates rise and investors can buy 10-year Treasury bills with a 5 percent yield, real estate will seem less attractive, Titus said.

There is a reason the commercial real estate market is awash with capital, and yield is only part of the equation. When you can also leverage T-bills at a 10-20 to 1 ratio, then real estate will seem less attractive...