I respect the opinion of Sam Zell on real estate.

Billionaire Sam Zell, founder of the largest publicly traded apartment landlord in the U.S., is investing in distressed debt instead of real estate stocks or property and expects a housing recovery next year.

“We believe that the opportunities, particularly in difficult situations, are in the debt,” said Zell, who is looking to buy both real estate debt and distressed corporate debt now trading at a discount. He declined to be specific.

The U.S. may see the bottom of the single-family housing market early next year, Zell, 66, said in an interview today with Bloomberg Television. “I think it will be relatively fragile as confidence builds and it will take probably another year for confidence to be completely returned.”

“New apartment construction will be a very small percentage, maybe 40 percent, of what it has been in the past few years,” Zell said. “With no new supply, I think that the prospects for the rental housing market are very strong.”

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