Equity International replicated its success in Brazil, where it built a much smaller housing company. "We're doing self-storage.  We're doing hotels.  It's a market with extraordinary opportunity," Zell says. "Brazil has 180 million people. It's growing 4% to 5%, 6% a year. So you have scale. It's self-sufficient in water, energy. And I think we have a phenomenal future. And as a result we ended up spending and investing and creating a lot of opportunity ourselves. Brazil's one country in the world and we chase lots of other opportunities lots of other places."

Indonesia, Turkey, Colombia and Morocco are the four new countries where Equity International is chasing opportunity. "I should caution my comments by saying that even though what attracts us are what I would call the general conditions of the country—size and scale, inflation, discipline, etc.—but in the end, transactions are predicated by opportunity," Zell says.  "In some scenarios, we love markets but haven't been able to find the appropriate opportunity."

In investigating emerging markets, there probably is "no sweeter spot in a country's history" than as it approaches investment grade, Zell says, adding that one of the reasons Equity International went into Mexico was that the country was on the verge of becoming investment grade. "Same thing happened in Brazil. Now we've got the scenarios where, for example, Indonesia is very close to investment grade, maybe two or three years away." Approaching investment grade "is the ultimate discipline because as soon as you hit investment grade, there is a very real benefit, immediately to the country," he says.

One place where the scenario might not be so positive is Egypt. "Anybody who reads the paper and knows what's going on, would have to be worried about Egypt," Zell says. "We have one platform company in Egypt that builds low-income housing.  So far, the good news is, they haven't been run over or anything. The bad news is we're also not selling anything, so it's very hard to budget. We built about 50,000 houses and I think we sold about 12. We're hopeful that the situation in Egypt will stabilize.  I think at the moment, it's very much unknown."

Turkey, on the other hand, seems to have escaped the turmoil. "Turkey is a place that we've been very interested in," he says.  "Generally, we invest three to five years in an emerging market before we make an investment.  In Brazil, we literally schlepped around and saw everybody in the business before we made our first investment.  And we've been working on Turkey for some time and we have a lot of faith in its future."

However, the country that excites Zell the most is Colombia, despite its past reputation as a haven for drug cartels, which he says is mostly history.  The country has extraordinary mineral deposits and is a major exporter of copper. Over the last few years, Colombia's production of oil has gone from 100,000 barrels a day to just shy of 1 million barrels a day, Zell says, largely because Hugo Chavez chased the oil companies out of Venezuela. 

"The result was that all of these trained executives left Venezuela, moved to Colombia," he says. "They took all of their knowledge and experience, applied it to Colombia and they're now producing eight to 10 times more oil per day than they did before. That translates into growth. That translates into opportunity."

The drug cartels and related violence reported in Mexico haven't affected the company's investments there, but "if I were to make new investments in Mexico today—which I would be willing to make—that certainly would be a factor for consideration," he says.

Moving to the topic of commercial real estate, Zell says that "the commercial real estate market has and will come through all of this in pretty good shape." Because nothing has been built since 2007, supply has been limited, and the low interest rates mean there is no cost of money, so banks have been able to feed distressed properties into the market. "Everybody adopted a pretend and extend philosophy, which is, 'The loan is due next week, why don't we pretend everything is fine and we'll get an extension for two years, and then we'll worry about it.' And effectively that's what happened," he says.

Still some states are suffering, such as Michigan, Nevada and Arizona. When asked about whether he sees opportunity, Zell says he doesn't like to make broad brush statements. However, "there seems to be a growing disparity between the coasts and the center of the country," he says. "And in previous years, every time that things got too far out of line, you have basically businesses moving to the center. You've got a very significant exodus from California to Texas, as an example. When that disparity gets big enough, then Chicago and Atlanta and various other places in the middle of the country that are currently out of favor will recover. Certainly it's possible that buying something in Chicago today is probably half [the price] of the exact square footage in New York City. It's too big a disparity.  And therefore, it might be a very interesting opportunity."

If he had to pick the single biggest economic risk he worries about, Zell says it would be the dollar's loss of its status as a reserve currency.  "I think that if the U.S. dollar were no longer the reserve currency of the world, it's likely there will be a 25% reduction in the standard of living in this country."

As an example, he cites trade between China and Brazil. "Ore going to China, finished goods going to Brazil. Historically that whole process would include conversion to dollars and then conversion to the real or conversion to the yuan. Today, China and Brazil are starting to do cross-partner transactions in their own currency. That means that the role of the dollar, and therefore the demand for the dollar, goes down every time one of those transactions occurs without the U.S. dollar being part of the process." And as interest rates rise in other places in the world, the money will chase the interest rates, Zell says.  "And the only way to stop that is by lowering the value of the dollar, which they're doing an extraordinarily good job at. It's only one of a number of problems we're facing."

Finally, on Congress and the deficit, Zell says: "My attitude is that the deficit is totally and unequivocally unsustainable. Both Congress and the president are preposterous in their lack of responsibility and understanding what all these spending programs are doing to the future and particularly to our children and our grandchildren. The failure to correct the conditions is criminal."