Sam Zell Bets on Brazil

Property Wire is reporting that Sam Zell plans to open a real estate specialty financing company in Brazil:

Zell, who declared a couple of months ago that Brazil is the 'number one country in the world for investments, is looking for a partner for his Equity International real estate investment company with a view to grow Brazil's 'still nascent' real estate financing market.

The company's, chief strategic officer Thomas McDonald confirmed that the move is on the cards and added that it may open its own company to provide financing to real estate developers.

The timing is interesting as one could argue that Sam Zell is a little late to get on the Brazil bandwagon. Companies like Brookfield Properties and GE Real Estate started investing in Brazil probably as early as 2007. Brookfield, in particular, through its Brascan Brasil Real Estate Partners private equity fund, has invested in 15 high quality shopping malls in Brazil including two properties under development. The $800 million fund is fully invested and some expects that Brookfield will launch a second similar fund.

So why does Zell want to bet on Brazil now? From Property Wire:

McDonald said that a 5% cut in Brazil's Selic interest rate this year to 8.75% and a $18 billion housing stimulus plan announced by the government in March have boosted demand for residential and commercial real estate investments.

'Real estate specialty financing is a sector that is still nascent in Brazil and there are opportunities here that aren't being met in a scalable way. We haven't yet found the right platform to do that. At some point we'll find the right one or we'll create it ourselves,' he declared.