Warehouses `Getting Too Exciting' in E-Commerce Age, Zell Says

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(Bloomberg) -- Investor interest in building and acquiring warehouses in the age of Amazon.com Inc. is overheating, and there might be more distribution centers created than there will be tenants to fill them, billionaire Sam Zell said.

“My guess is it is getting too exciting and we are building too much industrial space,” Zell said Monday in a Bloomberg Television interview from the Milken Institute Global Conference in Beverly Hills, California.

E-commerce is reconfiguring supply chains and shaping the fortunes of U.S. industrial landlords, especially near larger cities, where online shopping is most popular. Real estate investment trusts that lease out space at warehouses and logistics centers have been outperforming those that focus on malls, rental apartments or office buildings.

Zell, chairman and founder of Chicago-based Equity Group Investments, made his comments on the day after Prologis Inc., the world’s largest warehouse owner, agreed to acquire rival DCT Industrial Trust Inc. for $8.4 billion in stock and assumed debt. Zell’s Equity International has invested in warehouse owners and developers in Asia, Mexico and Brazil, according to the firm’s website.

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