Real estate mogul Sam Zell said he expects little national commercial real estate construction, except for apartment houses, over the next one to three years, restricting supply and improving the value of existing properties.

"We’re now approaching three and a half years of no development, and I see little prospect for new supply over the next 12 to 36 months except multifamily," Zell told investors and experts at the Argyle Executive Forum in Manhattan today.

With little new supply, the value of existing office buildings, shopping centers, hotels, warehouses and distribution centers should increase and vacancies should fall, Zell said.

That could cause lenders to stop extending maturities on loans on "underwater" properties and fuel property sales, he said.

"I think real estate is going to do well over the next 24 months," he said. "When the buildings fill, then pretend and extend is over." (Reuters)