Monthly Letter

I had the pleasure of attending the Univesity of San Diego annual Commercial Real Estate forecast event last month. Sam Zell the real estate mogul and billionaire was the keynote speaker. I learned two things and thought I would pass them on to you.

1. Sam noted that rents rise to meet construction or replacement costs. I agree 100%. Given the high cost of construction right now we have a lot of room for rents to go up. I believe this creates a "protected" investment opportunity right now. It is not if but when will rents rise.

2. Sam apparently does an annual video (usually to music) that gives his view of some economic issue. They are very insightful and educational. I have posted the web link below (double click on it). He showed the 2005 one on liquidity (wow is that one spot on). I particularly like the 2003 "Wired Exports" one. I hope you enjoy them as much as I did. Good economics lessons to music!

Sam Zell Year End Gifts

Regards, Don (858.486.9999)

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