Brazil might be an exception to the rule of thumb that says avoid the asset everyone’s piling into, according to the chief executive of Equity International, the international arm of real estate mogul Sam Zell.

The potential for Brazilian growth is still great because pent-up demand outstrips supply for the consumer in any number of areas, including housing and both durable and non-durable goods, just to name a few, said Gary Garrabrant, EI’s CEO.

Another sign of potential gains, Garrabrant told the Reuters 2011 Investment Outlook Summit in New York on Wednesday, is that financing a shopping center or office building is difficult, and Brazilian banks still aren’t good lenders, he said.

“This is going to take some time for Brazil to create the financial infrastructure whereby capital is available in debt and equity form, intelligently, rationally,” Garrabrant said.

So, talk of an overheated market has to be taken in context, considering Brazil is a country of 190 million that has transformed from a mostly poor to majority middle-class nation.

While the number of native English speakers aboard flights to Brazil can be jarring for an investor accustomed to avoiding the crowd, strong demand and a wide gap in efficiency make the country compelling, Garrabrant said.

“There’s a capital inefficiency that prevails, so the hype, the headlines, have to be tempered a bit by this inefficiency that’s going to continue to improve,” he said.

As an example, Garrabrant said, a year ago there were only 400,000 mortgages in Brazil, a number that likely is matched in Manhattan alone in the United States.

DEMAND STRONG

Consumer demand shows no signs of letting up. BR Malls Participacoes SA (BRML3.SA), a shopping center operator that EI invests in, has a 98 percent occupancy rate and same-store sales and rents that are up more than 10 percent year over year.

“We’ve got a line of tenants, both international and Brazilian, who want to be in our malls,” Garrabrant said.

Some data suggests a potentially overheated economy, however. Real estate lending rose 46 percent in August from a year earlier, a pace that has quickened despite interest rate hikes. Inflation in November rose at its fastest pace in five years, and auto sales are expected to rise in 2011 for a fifth consecutive year.

While Brazil may be popping up on everybody’s must-have lists, Garrabrant is increasing his search for opportunities, spurred by signs of a country that is maturing by leaps and bounds.

“We’re advancing deeper into new sectors, where the barriers to entry are even higher. We’re progressing in regional markets in Brazil,” he said. “We feel there is more political risk in the United States than Brazil.”