By Peter Grant 

Global real-estate investors such as Blackstone Group LP, Brookfield Property Partners LP and Global Logistic Properties are taking advantage of the political upheaval and economic decline in Brazil by bargain hunting in the country.

Most investors have moved to the sidelines as rents and occupancy levels have fallen. With Brazil's growth rate plunging and protests mounting, the volume of reported commercial property sales hit only $584 million last year, compared with $698.6 million in 2013 and $1.92 billion in 2012, according to Real Capital Analytics Inc.

But Blackstone's real-estate group has made two acquisitions in recent months: stakes in a Brazilian home builder and a portfolio of four office buildings in Rio de Janeiro. Blackstone's real-estate group also is opening its own office in the country for the first time, to be led by Martcelo Fedak, formerly head of real estate for Brazilian financial-services firm BTG Pactual.

Meanwhile, Singapore-based Global Logistic, which last year bought a portfolio of 34 industrial properties in Brazil for $1.36 billion, this year is buying development sites from small owners "who are finding it hard to raise capital," according to Mauro Dias, president of the company's business in Brazil.

Brookfield, for its part, has agreed to buy seven office buildings as part of a plan by BTG Pactual to buy the stake it doesn't already own in Brazilian real-estate owner BR Properties SA.

"It is in our view a good time to buy," said Ric Clark, chief executive of Brookfield's real estate business.

There are many investors who regret recent investments in Brazilian real estate. Shares of listed real-estate companies such as General Shopping Brasil, JHSF Partipacoes SA and Sonae Sierra Brasil SA have fallen sharply. Many new stores, apartments and office buildings now hitting the market are meeting with weak demand.

But investors who remain bullish point out that boom-and-bust cycles are to be expected in an emerging market such as Brazil. They also say they have confidence in the strength of the engines that until recently powered the country's strong growth--including its abundant natural resources and growing middle class.

"The country has some core strength that hasn't changed despite the current challenges," said Rob Speyer, co-chief executive of Tishman Speyer Properties, which has been developing office and apartment buildings in Brazil for two decades.

Mr. Speyer said Tishman Speyer "doubled down" on Brazil in 2002 after the country hit a rough patch of political and economic uncertainty, and the bet helped the firm become a dominant player in the country. Tishman Speyer is now pursuing a similar strategy: It recently purchased its first development site in Belo Horizonte, a big mining area, for an office building.

Tishman Speyer also just bought a site in the Porto Maravilha section of Rio De Janeiro where it plans to develop 1,000 units of housing.

"We're voting with our capital," Mr. Speyer said.

Investors on the prowl for bargains include some new players but also a number of familiar faces. Sam Zell, who helped lead a wave of international investment in Brazilian real estate that started about 10 years ago, is looking for deals. So is his former partner, Gary Garrabrant, who started his own firm, Jaguar Growth Partners.

Foreign players, of course, have been able to take advantage of the recent plunge in the Brazilian real, which is worth about 32 U.S. cents these days, compared with more than 60 cents in 2011. But big domestic investment companies, like BTG Pactual, also are looking for opportunities in distressed properties. BTG just raised a $500 million fund that is focusing on heavily indebted residential projects, according to people familiar with the matter.

Blackstone's real-estate group has been eyeing Brazil for a number of years, especially after the firm established a beachhead in Brazil in 2010 by buying a 40% stake in Patria, a Brazilian investment firm. The group decided to make its move and set up its own shop partly because of the recent decline in values, according to Kenneth Caplan, the group's chief investment officer.

The group made its recent acquisitions in 50-50 partnerships with Patria, and will likely continue co-investing with Patria in the future, Mr. Caplan said.

"It does feel like now is an interesting moment," he said. "We're starting to see some opportunities that we weren't seeing six months ago."

Investors who are bullish on Brazil acknowledge there are risks to moving too early. The country's high inflation and interest rates could last longer than expected. There are no guarantees political turmoil will calm or that financial reforms will work.

But waiting too long also can be problematic.

"Once the all clear sounds, it sometimes feels like it's a bit late," Mr. Caplan said.

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