Amanda Orson Recounts Sam Zell's Fixed-Rate Debt Strategy in Inflation
Amanda Orson compares Trammel Crow and Sam Zell's real estate strategies through the 1970s rising-rate environment, quoting Zell on accumulating assets with cheap fixed-rate debt during inflation.
Original post · 1 min read
- Sam Zell
Amanda Orson @amandaorsonMost of us weren't alive during the last rising-interest-rate environment in the 70s but let's rewind through the lens of two different investors:
Trammel Crow and Sam Zell
Crow pioneered warehouse development and was doing both lots of projects and some BIG projects (Embarcadero in SF, Peachtree in Atlanta). He had a decentralized partnership model. By the end of 1974 (inflation peaked around 12%) his annual cashflow was -$25M and he had hundreds of partnerships and $400M in short-term debt, of which $151M was PGed. (🤢)
By 1972, Zell not only had stopped his own apartment acquisitions (th…

