More Zell on prospects -- and mixed messages

Even though he sees the U.S. residential market turning around, Sam Zell's now also saying that he's not seeing significant opportunities for real estate in the developed world. His bet right now? Housing developments in Egypt, Chile, Mexico, China and Brazil. I'm guessing he means the mega-returns that opportunistic guys like him want.

But here's the somewhat better news:

"I don't expect to see any dramatic change in cap rates or the viability of high-quality office investments in the U.S.", he said, adding the pace of new developments had slowed sharply since the summer, which would help keep a lid on supply.

Yes, there is less demand right now, but supply is not what it was in the 1990s. That does not mean that will not change in some markets down the line (Chicago in 2009-10, for instance), but we also can't crystal ball the economy two years down either.

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