CHICAGO-Nearly everyone involved with commercial real estate investment, including the iconic Sam Zell with Equity Residential, says Brazil is the country to watch in the next few years. This theme was echoed Tuesday, when Jones Lang LaSalle presented its Insider’s Perspective Conference on Latin America here, led by the prediction that Brazil and Mexico will become the world’s fourth and fifth largest economies by 2050.

The Latin America countries, led by Brazil and Mexico, will sustain 5% growth each year for the next five years, said Pedro Azcue, CEO of JLL’s Latin America division. Brazil itself will grow at 7% each year, he said. “We know that the emerging countries will lead us out of this global recession, and Brazil and Mexico will lead that charge,” he said. “We are no longer the backyard of the United States.”

Andre Rosa, regional director of JLL Brazil, said the country was mostly unaffected by the recession because inflation is under control, the local currency is appreciating against the dollar, interest rates are declining, and there’s healthy banks and strong domestic demand. “There’s been about 40 million people added to the Brazil middle class in the past 10 years,” Rosa said.

Just about every Brazil property market is growing at a better rate than US cities, Rosa said. Sao Paolo, Brazil’s largest office market (about the size of Chicago), has vacancy of about 8.5%. The country has 400 malls and has a tenant growth rate of about 4% per year. Companies that own buildings are looking for sale-leaseback opportunities, such as Mercedes-Benz looking to sell more than 1.5 million square feet of office. “Brazil is one of the best long-term, low-risk growth areas,” Rosa said.

Mexico, however, was severely affected by the US recession, said Hector Klerian, EVP of JLL Mexico. Also, violence in states bordering the US and the threat of the H1N1 flu hasn’t helped matters. Though the property markets have rebounded somewhat, Klerian said, office vacancy will likely increase to 17% in the next five years due to overbuilding, and industrial vacancy will also rise past the current 8.1%.

There are positives about Mexico, though, Klerian said. Though it’s not likely to make Detroit happy, the country is the fourth largest manufacturer of automobiles in the world. Also, there’s a large growing segment of youth – about 60% of the population is younger than 30 years old, and about 30% is younger than 15 years old, Klerian said.