Amazon‘s recent $13.7 billion acquisition of Whole Foods won’t really change brick-and-mortar retail, billionaire real estate investor Sam Zell told CNBC on Tuesday.

“I don’t mean to be disrespectful of Amazon, but I don’t think Amazon reinvented the wheel. I don’t think buying Whole Foods is going to make it easier for Amazon to fulfill its objectives,” Zell said on “Squawk Box.”

The founder and chairman of property specialist Equity Group Investments believes physical Whole Foods stores five years from now “will be half the size they are today or maybe even smaller.” Zell also chairs five NYSE-listed companies, including three real estate investment trusts.

“Basically, Amazon is buying depots, not retailers,” argued Zell, suggesting that Amazon benefits more from having local locations for shipping and online purchase pickups rather than from running actual stores.

Known for seeking out and investing in diamonds in the rough, Zell described the real estate side of the retail business as “a falling knife.”

“I’m generally a contrarian. I generally rub my hands together at the opportunity for serious dislodgement,” he said. “[But] an area that’s in this much disarray, with so many weak players, it’s not an area where I would want to deploy capital at this time.”

Zell did say that in many cases the locations of retail stores are desirable, even if the objectives of the businesses are not.

“The basic regional mall is becoming a mini-downtown, and becoming much more diverse. And therefore saving itself,” he said. “The local corner strip center is still convenience. Everything in between is an oxymoron.”

The real problem has to do with supply, Zell said. “The U.S. has four or five times the amount of square footage per person of retail as anywhere else in the world.” As the industry deals with a correction, retail is going to be “less comfortable for the next few years,” he added.