Sam Zell, a self-proclaimed “professional opportunist,” founded his privately-held firm with a fraternity brother in 1968. The two bought up cheap real estate throughout the U.S. from distressed owners, and then kept buying when values recovered and boomed.

In this interview, he speaks about the need to support Fannie Mae (FNM) and Freddie Mac (FRE) debt, at the expense of shareholders, the opportunities he now sees in the distressed debt sector and the environment for some REIT Stocks.

He says real estate is “fairly” priced (not overpriced) and that his focus on investing in distressed debt is just a natural outgrowth of his focus on value – he sees more of it in the debt than he does in the equity. He also says that the credit crisis has virtually shut down all new apartment development (he is also Chairman of Equity Residential (EQR), a large publicly-traded apartment REIT), so that from a supply standpoint things look very good in apartment REITs, and demand obviously will be driven by all those former homeowners who can no longer get “liar” loans.

REIT Wrecks also believes that Apartment REITs will be the first to recover. In fact, the best performing Apartment REIT for 2009 may be one you’ve never heard of. See also REIT Definition for more background on how REITs work. Scroll down for more REIT and real estate related news, resources and links.

Click here for a list of Apartment REITs
Click here for a list of Hotel REITs
Click here for a list of Industrial REITs
Click here for a list of Mortgage REITs
Click here for a list of Office REITs
Click here for a list of Retail REITs
Click here for a list of Storage REITs
Click here for a list of all REITs
Click here for a list of REITs paying dividends in stock

Information on how REITs work can be found in the post REIT Definition.

Disclosures: None at the time of this writing

But now the specter of job losses is beginning to spread the gloom into this sector as well. As would-be renters are doubling up in apartments or moving in with friends and families, rents and occupancy rates on apartments are beginning to fall in many cities. The so-called “growth” in many areas of the country was illusory and tied to the housing boom (construction, mortgage brokerage, remodeling, borrowing on home equity to pay for dinners out, etc.). Long term, the trends have never been better for Apartment REITs, but right now there is just no place to hide.

Click here for a complete Apartment REIT list, including current yields. See also REIT Definition for an explanation of how REITs work. Scroll down for more REIT and real estate related news, resources and links.

Disclosure: None