Zell invests in hotel chains

Billionaire real estate developer Sam Zell bought a 7.7 percent stake in Starwood Hotels & Resorts Worldwide Inc. to become the company's second-biggest shareholder.

A unit of Zell's Equity Group Investments LLC said Monday in a regulatory filing that it holds 14.8 million shares of White Plains, N.Y.-based Starwood. Starwood owns the Sheraton and Westin hotel chains. Barclays Global Investors is the largest Starwood investor, according to data compiled by Bloomberg.

Zell boosted his stake in hotels one year after selling Equity Office Properties Trust to Blackstone Group LP for a record $39 billion at the peak of the office market. His emergence as a buyer may signal the commercial real estate market has bottomed, said James Corl, chief investment officer for real estate securities at Cohen & Steers Inc.

"It's a huge data point," New York-based Corl said in an interview. "Sam Zell as a seller started the REIT market decline last February and I think Sam Zell as a buyer probably marks the bottom in real estate stocks."

Zell also led an $8.2 billion buyout of Tribune Co. in December, saying the company's newspapers "represent an extraordinary opportunity, and we're going to take advantage of it."