If nothing else, Sam Zell is candid.

He says what he thinks, doesn’t allow emotion to seep into his deals and has not shied away from controversy.

He’s not in business to make friends. He’s in it to make money. And it doesn’t matter what you think about how he does it. He is famously known as the “grave dancer” for profiting off distressed real estate in the past. And he never backed away from that moniker, once writing in an article, “I was dancing on the skeletons of other people’s mistakes.”

For that, he’s got both fans and detractors.

Zell doesn’t proclaim to have any complicated strategies when it comes to deals. And he’s not hiding his philosophies either. The website for Equity Group Investments includes a section called “Zell’s Fundamentals” that features 13 brief statements—what some in the industry call “Sam-isms.” The statements may seem self-evident, such as “Ensure management’s interests are aligned with shareholders.” “Look for opportunities in markets with pent-up demand.” And “Understand the downside.” But just knowing what Zell does, doesn’t make it easy to emulate him. And perhaps that comes down to another of his statements: “Sentimentality about an investment leads to a lack of discipline.”

Zell doesn’t make deals for the greater good. He doesn’t make blanket decisions about sectors or property types. He doesn’t bow to conventional wisdom, which he thinks rarely results in profits. For example, he didn’t invest in the Tribune Company to provide a community service. He strikes when he sees a business opportunity and doesn’t let other factors cloud that decision.

As a result, through the years his investments have been wide ranging. He’s a legend in the commercial real estate business for building (and divesting) portfolios. Most famously, he helped engineer the $39 billion sale of Equity Office Properties to the Blackstone Group in early 2007—at the time, the largest private equity transaction ever completed and a deal that has come to signaled the apex of the last commercial real estate cycle. Blackstone went on to flip $27 billion of those properties within months—before the market fully turned. As a result, Equity Office’s shareholders and Blackstone made out well, while many of the firms that ultimately purchased those assets struggled mightily.

But Zell’s companies have a wide range of holdings across the globe. Between his two major firms, Equity Group Investments (founded more than four decades ago) and Equity International (formed in 1999), Zell’s holdings span six continents. They cover every type of commercial real estate, but his firms’ holdings include or have included residential real estate, finance, oil and gas, transportation, cruise ships, media and communications.

Within the United States, he maintains interests in, and is the chairman of, five public companies listed on the New York Stock Exchange: Equity Residential Properties Trust, a multifamily REIT; Equity LifeStyle Properties, a REIT that owns and operates manufactured home communities; Capital Trust, a real estate finance company; Covanta Holding Corp., a firm that converts waste into energy; and Anxiter, a provider of networking and cabling solutions. And he is also chairman of the Tribune Co., a media conglomerate whose holdings include the Los Angeles Times, the Chicago Tribune along with several other newspapers and television stations.

Since the Equity Office deal, Zell, until recently, has had a lower profile in the commercial real estate sector. He’s been in the headlines more for a rancorous stretch at Tribune. Yet firms with ties to Zell have remained active. Equity Residential continues to grow and thrive. And now that firm is in the headlines thanks to a very public fight over the future of Archstone.

In June, Equity Group Investments LLC formed a joint venture with Behringer Harvard and Transwestern Investment Co. LLC to recapitalize the 40-story, 754,75-sq.-ft. office tower 200 S. Wacker Dr. in the West Loop of Chicago’s center business district. The joint venture purchased 90 percent of the asset. Equity Group Investments invested in the building through the Zell Credit Opportunities Fund, which focuses primarily on debt investments and capital restructurings. The deal valued the asset, which is 30 percent vacant, at approximately $105 million. Behringer had previously defaulted on a $95.5 million mortgage on the asset. And it was Zell’s first office investment in years.

Then, in November, the same fund made a roughly $100 million investment in the Elysian Hotel Chicago in a joint venture with Hilton Worldwide. The deal valued the property at more than $500,000 per room, the highest ever price paid for a Chicago hotel. The joint venture rebranded the property as the Waldorf Astoria Chicago in February.

But, Zell cautions not to read too much into either deal. The Elysian transaction raised eyebrows, for example, because Zell has not historically been a big investor in the lodging sector. Yet he hasn’t come to some newfound liking for hospitality. Instead, it merely fits into a classic strategy of finding a scenario where an asset appears underpriced and dive in.

In December, Zell spoke with NREI about the recent investments, the Archstone bid and his overall investment outlook. An edited transcript of that interview follows.

NREI: Let’s start with the macro view. How do you see commercial real estate positioned overall in 2012?

Zell: There are a lot of things going on at the same time. The good news is that with the exception of apartments, there is little or no new supply. And I don’t think we’ll see much new construction in 2012.

At the same time, if you look at the overall economic picture, it’s likely that we’ll have positive growth in 2012, although there may not enough of it to dramatically change our unemployment numbers. That means the demand on the real estate side is still open to question. I think you’ll see a slow fill up of existing space.

On the finance side, a lot of the “pretend and extend” transactions done in 2008 and 2009 with terminal dates in 2012 and 2013 are likely to have to be redone in a different economic environment than was the case three or four years ago. Banks and holders of those debt instruments have many more options now than when they agreed to these extensions. That will lead to some interesting turmoil in the industry.

Overall, real estate is about supply and demand. I am concerned about the demand, but I’m comforted by the lack of supply.

NREI: How do you see refinancing playing out in terms of assets that got the “pretend and extend” treatment?

Zell: Let’s use a hypothetical example. It’s 2009, and you have a building that’s one-third vacant and the banks are confronted with taking a hit if they sold into that climate. Well, for some of those assets, pretend and extend has worked. Today, that building may be 90 percent full. And if it’s a investment-grade building, today there are 20 guys waiting to buy it. In 2009, the bank didn’t have much choice of what to do. Today, the choice is, “I can extend, I can extract more equity or I can take title in an arena where I can turn it into cash.”

NREI: You’ve been saying “Come Clean by 2013” for a while. What does that mean for the industry?

Zell: It’s strictly that we have a lot of stuff in the system that is mispriced and not realistically held. And that’s the result of pretend and extend and a bunch of other things. In order for commercial real estate to grow again, we need to eliminate the icebergs in the system.

NREI: Can you talk about some of the deals you’ve done or are doing, such as the pursuit of Archstone, the Elysian and 200 S. Wacker, and what they say about the investment climate overall?

Zell: I wear a bunch of hats. With Equity Residential, we’re very involved in this Archstone situation. We want to expand our footprint beyond where it is today. Those assets fit our objective. I don’t know how that situation will get resolved. But for Equity Residential, the deal is being driven strictly by the assets.

With the Elysian and South Wacker, those are unique one-off scenarios that were driven by cheapness. As we saw it, at the cost per sq. ft. to buy those assets, the deals had to work. In the case of the Elysian, the terms and conditions made it very attractive for us. We are asset allocators. We look at areas where we think we’re going to get the biggest bang for the buck.

In terms of the overall market, we’re not in a normal period of transactional velocity. I think just the opposite is the case. There will be transactional velocity in “cleaning up old stories.” But there’s unlikely to be a lot of it, at least from our perspective, in new transactions. It’s just not clear, other than in the apartment sector, what supply and demand fundamentals are going to look like.

NREI: What do you make of the current political environment—the elections, the potential for changes in legislation and taxation—and how that shapes the investment climate?

Zell: It starts with a simple premise called uncertainty. We’re involved in an economic environment today that is full of uncertainty. That makes it difficult for anybody to make long-term commitments, whether in the form of leases, investments or development.

Changes in the level of taxation or changes in legislation will alter that picture further. Do I think the current stalemate is positive? No.

On the other hand, the American people have to get a better handle on what makes sense and what doesn’t. Ultimately, that is what the 2012 election is about.

I’m not happy with the current political discourse and I do believe this particular administration has been destabilizing. It’s hard for me to imagine that we will be an engine of growth given the current disincentives. So I’m watching the 2012 election very carefully.

NREI: You’ve historically been a big proponent of REITs. But you also worked extensively on the private side. What’s your take on where to be now?

Zell: For many years, up until 1990, the private side was much more attractive than the public side. That shifted to the public side for 15 years. Then we had Equity Office Properties and other things taken private.

Going forward, access to capital is going to be the governor of the real estate business. Given that, in the current climate it’s likely that being public with that kind of debt-to-equity ratio is likely to be more successful going forward than the “leverage it up and take it private” model.

NREI: You’ve also been quite active internationally. What do things look like overseas?

Zell: Our international work began 13 years ago and the focus was to build real estate-related platforms in emerging markets with a particular emphasis on markets where there was already a preexisting unfulfilled demand. We’ve done hotels in India, net lease and retail in Brazil, retail in Mexico. We’ve done homebuilding in several of those markets, as well as in China and Egypt.

We built one of largest low-cost housing companies in Mexico with a local family and took it public on the New York Stock Exchange. We contributed both strategy and discipline. And that was a situation where one plus one equaled six or seven.

We replicated this in Brazil, where we built BRMalls by recognizing what was happening in that economy was an enormous burst in consumerism that would benefit retail real estate. That has been our theme.

We also just did our first deal in India. We were unable to successfully conclude anything for 10 years because the perceptions of market and value were so disparate. Today, things have become normalized, so we will be able to do more there.

NREI: Any last words of wisdom?

Zell: I am a big proponent of entrepreneurship. I sponsor programs at the University of Michigan. In the end, America is all about entrepreneurship and all about what I would call the immigrant community. The sooner we get back to that idea, which includes fixing immigration and righting incentives, the better off we’ll be.