Simply put, Michael Fay is a real estate rainmaker. He has over 31 years of commercial real estate experience and more than $4.2 billion in transactions under his belt.
Not too long ago, he became Principal and Managing Director of Avison Young in Miami, a firm that brings a lot of real estate intellectual capital to the table.
Fay recently came on the show as a powerhouse guest to talk about all aspects of the South Florida real estate market. I hit the high points below, but be sure to listen to the full interview for all the details.
Retail
In the retail market, redevelopment and re-purposing of properties is coming, Fay said.
“When you’re limited with Biscayne Bay on the one side and you’ve got the Everglades on the other, it feels like an island. Like New York City, but at the end of the peninsula in South Florida. We’re in a nice spot here,” he said.
We will still see high-rise development with ground-floor retail, Fay added, but it will be planned much better.
Transportation
Congestion on the roads will lead to more urbanization, Fay said. More and more, people will be living within their “doughnuts.”
“Look at the difference between Brickell City Center and World Center. Those are two doughnuts that will basically be living areas – but then crossing over with each other,” he said.
Institutional Industrial
There’s a lot of money chasing a lot of institutional industrial deals, Fay said, and the growing list of favorable logistical elements is making investment properties scarce.
“It’s hard at times to make something happen. Supply is tough, so you gotta’ build. Today, you almost have to forget buying existing. You have to build for it.” he said.
User Industrial
It’s also tough to find investment deals among small user-oriented industrial properties, Fay said, but owners are seeing nice rent growth and lower vacancies. Tenants are looking to increase space, which means moving or making the best of what they have.
Rental Residential
“Everybody is running around this town looking for great sites – and they want to figure out how to make it work. The money is out there to make it work. The questions are where, how much, and what is the demand,” Fay said.
Condos
Fay said he loves condos. Condos have made Miami, he said.
Some reports list Miami as the sixth wealthiest city on the planet, he added. The irony is that, not so long ago, you had to beg institutional investors to even look at Miami. Now, they’re clamoring to be here.
Office
Office rental rates are rising, Fay said, and there are good sites throughout the area.
“I think there will be some other mixed-use projects, and there will be an office consideration in a lot of these new development deals,” he said.
“It’s hard to sometimes make some of those numbers work, but when you’re the only game in town, you’re going to have something.”
High Net-Worth Investors
Well-heeled investors have many opportunities vying for their money, Fay said, but real estate always offers a different use of funds. There are different growth advantages and different tax advantages.
“We are helping them try to pick out what is best. Is it a good time to sell? Is it a good time to re-invest? Is it a good time to do a 1031 exchange? How are we building value for their properties and assets? We look at it from a holistic standpoint, and they help them figure out what to do,” he said.
Single-Family Residential
South Dade is the spot for single-family development, Fay said. The Homestead and Florida City markets have picked up dramatically. Elsewhere, there are pockets of activity. The key is to find the right pocket.
New Commercial Real Estate Firms
Avison Young is the fastest-growing commercial real estate firm in the world, Fay said. They are recruiting top people in each market.
“We’re a principally-led firm. Every single one of these people has a pure investment in this company,” he said. “It’s different dealing with principals and partners. When you work with different groups across the country, partners count.”
Click here to listen to the full interview with Michael T. Fay, Principal and Managing Director of Avison Young in Miami.
