Sam Zell, the billionaire real estate investor, died this week at the age of 81. That seems young to me. Or maybe I’m just being overly optimistic about life expectancy. This is around the US average.

Whatever the case, if you work in real estate, you likely know/knew of Sam. In my case, he spent a lot of time at Penn after he permanently endowed the real estate center (under both his name and his late business partner’s name).

I used to go and listen to him speak at least twice a year, and I would hang off his every word as a young student of real estate. “So wait, how does this all work?”

It was also at this time that he sold Equity Office to Blackstone for $39 billion (back in 2007, it was the largest private equity deal in history). Sam’s explanation for doing this deal was that Blackstone offered him more than what he thought the portfolio was worth, so he sold it. He took no credit for good market timing.

If you’ve ever heard Sam speak, you know that he’s incredibly direct. Generally, he also didn’t seem to give a fuck, and was happy being the only person in a Hawaiian shirt among a sea of blue and black suits.

In fact, he’s largely the reason that, as students, we used to all joke that the richer the speaker, the more funny and honest they would be. “Come on, let’s go to this one. She’s rich.” I guess this is just what happens when you no longer have anything to prove.

But none of this is to say that he didn’t care. He cared a great deal about the school and about helping young students. And for that, I say: thank you Sam. Thank you for being generous with your time.

Billionaire Sam Zell has a (relatively) new book out called, Am I Being Too Subtle?: Straight Talk From a Business Rebel.

I haven’t read it yet, but I’ve added it to my queue. I can, however, tell you that I always enjoyed listening to Zell speak candidly about business and real estate when I was in graduate school and he would come in. He was never one to mince his words.

He’s making the rounds right now to promote this new book and he recently sat down with William D. Cohan of the New Yorker. Not surprisingly, the Chicago Tribute debacle formed a large part of the conversation – up until Zell got tired of talking about it.

“That is the L.B.O. that drove this company into bankruptcy.” Zell said, of the Tribune experience, “I made a bet. I thought the bet was reasonable. I underwrote it appropriately. I was wrong.” He lost his entire investment.

But this misstep did nothing to phase Zell’s contrarian approach to business and life:

Zell attributes his wealth to a prescription articulated by any number of successful business people: zigging when everyone else is zagging. It’s a replicable formula, he says, and he has little patience for people who complain that it was somehow easier in the good old days, or that the moment for such opportunities has passed. (His earliest successes came from investing in real-estate assets that others shunned.)

He refuses to listen when he’s told he can’t do something. “I spent my whole life listening to people explain to me that I don’t get it,” he says. “I look at the Forbes 400 list, and if I eliminate the people who inherited the money, everybody else went left when conventional wisdom said to go right. How did I do what I did? By not listening to anybody else.”

It’s the Sam Zell way.

In 1960, real estate investment trusts were created in the U.S. with the goal of democratizing real estate ownership. Here’s how Yale professor Robert Schiller described it:

“REITs were created by law in 1960 to democratize the real estate market and make it possible for a broad base of investors to participate in this huge asset class. That was absolutely the right thing to do, because portfolio theory tells us people should diversify across major asset classes, and real estate is one of them.”

But a lot of things have changed since 1960. We now have the internet. 

And one of the things that the internet is very good at is creating peer-to-peer networks that connect supply and demand without the same kind of intermediaries. This could be people who have MP3s with people who want MP3s or it could be people who have real estate with people who are looking to invest in real estate.

So with the advent of crowdfunding in both the U.S. and Canada, I think we are at the dawn of another era of real estate democratization. Already we have seen the first crowdfunded real estate development project and it happened at a much smaller and local scale than is usually the case with REITs.

Similarly, we are also seeing companies emerge – such as HomeUnion in the U.S. – that allow people to build their own rental portfolios by directly investing, either fully or partially, in real estate. Again, there are differences here compared to how REITs typically operate.

When I was in grad school at Penn and Sam Zell used to come in and talk to the students, he used always mention how when he started out in real estate (1960s) the industry was disproportionately controlled by a small number of players. That’s been changing ever since and it looks like that trend will only continue.