Victor Garcia, Regional Manager, Miami, Marcus & Millichap

In an interview with Invest:, Victor Garcia, regional manager at Marcus & Millichap, shared insights on Miami’s commercial real estate landscape. He discussed market trends, the city’s rapid growth, challenges like infrastructure and housing, and the firm’s role in shaping Miami’s evolving economic future.

How did the last year unfold for the organization, and what does that say about the state of the industry?

Last year was similar to 2023, with muted transaction volume due to a rapid rise in interest rates and more conservative lender underwriting. This created pricing uncertainty, keeping many investors on the sidelines.

The market also faced inflation-driven operational cost increases, while large-scale natural disasters sent property insurance costs soaring. Election-related uncertainty further delayed investment decisions.

Toward the latter part of the year, positive signs emerged. After the Fed began lowering interest rates in September, demand from both buyers and sellers increased, boosting transaction velocity. We also saw a shift toward larger deals, whereas prior years were dominated by smaller transactions.

Now, with election-related uncertainty behind us, investor sentiment is improving. Economic and capital market headwinds are easing, setting the stage for a more active 2025.

What have been notable successes for your organization over the last year?

Marcus & Millichap remained the No. 1 brokerage firm in transaction volume. We were also ranked the top firm for multifamily, retail, and self-storage properties while maintaining leadership across all major product types.

In the 12 months ending in 2024, we closed nearly 7,300 transactions, representing over $43 billion in sales. Our institutional division, IPA, delivered $9.5 billion in volume, while Marcus & Millichap Capital Corporation (MMCC) facilitated 1,000-plus financing transactions totaling $7.1 billion, providing clients access to 350+ capital sources.

We drove over $11 billion in cross-border transactions, with 40% of buyers coming from out of state. We also remained a leader in the 1031 exchange market, closing around 1,100 transactions.

Our auction division saw strong growth, closing nearly 200 deals last year with an 88% trade rate for reserve auctions, an impressive feat in just two and a half years. Mission Capital, our loan sales arm, continues to advise and sell loans for top lenders and investors.

Throughout the downturn, we stayed committed to investing in client events, conferences, and proprietary technology, empowering our professionals to drive client success.

What key trends are shaping the commercial real estate industry, and how are you navigating them?

We see five major trends shaping 2025. The first major trend is a market realignment that has led to more realistic pricing from owners who need to sell due to upcoming loan maturities or situational distress. This, combined with pent-up demand, is driving an increase in transaction volume. Second, while the Federal Reserve has pivoted toward lowering rates, stubborn inflation and ongoing economic growth suggest that rate cuts will be gradual. The market is adjusting to the reality that interest rates are unlikely to return to the historic lows of recent years.

Another key trend is the overall strength of commercial real estate fundamentals. Occupancies remain healthy, and overbuilding has been largely kept in check, except for multifamily in select Sun Belt markets. Even in the office sector, distress is mostly limited to older, obsolete buildings that have failed to keep up with modern tenant demands. Additionally, the resolution of the presidential election has removed a major source of uncertainty, which is positive for economic growth and increases the likelihood of an extension of the 2017 Tax Cuts and Jobs Act. This package contains several provisions favorable to real estate investors and could have a significant impact on the industry.

Finally, we are seeing a surge in investor activity due to the fear of missing out. A record amount of dry powder capital is sitting on the sidelines, waiting to re-enter the market. As property values adjust, many investors see attractive opportunities, especially compared to replacement cost, where pricing is shaking out today vs. at the market peak in 2022. These factors point to a more dynamic and active market in the coming years.

What significant factors have driven Miami’s growth over the past decade, and how has your organization contributed to its success?

Miami has experienced tremendous growth over the past decade due to several key factors. A major driver has been the lack of a state income tax, attracting high-income earners, wealthy individuals, and corporations relocating their headquarters or opening regional branches. The city’s business-friendly regulatory environment has further strengthened its appeal. Additionally, strong net migration has fueled economic expansion.

Business relocations have played a crucial role, especially post-pandemic. At this point, it feels like every major company wants or needs a presence in Miami. Another factor is the city’s relatively low violent crime rate compared to other major U.S. cities. And, of course, Miami’s warm climate, especially in the winter, remains a major draw.

This growth has driven demand for commercial real estate. From housing and retail to offices, data centers, healthcare facilities, and warehouses, real estate is at the core of Miami’s expansion. Our firm plays a key role in facilitating these transactions, ensuring the economy continues to thrive while shaping Miami’s evolving landscape.

What strategies are needed to ensure Miami continues to attract international investment and talent?

With over 16 years in Miami’s commercial real estate sector, I believe the city must prioritize infrastructure, education, and healthcare to maintain its appeal to international investors and talent. One of the most pressing needs is public transportation. While there have been improvements, such as the Brightline high-speed rail, the city still lags behind other major metros. Continued investment in bus networks, metrorail expansion, and walkable urban trails like the Underline will be essential.

Port expansion is another critical factor. Dredging efforts to accommodate larger ships will benefit both tourism and trade, strengthening Miami’s role as a global business hub. Education also plays a major role, with institutions like the University of Miami and FIU providing top-tier higher learning and developing a skilled workforce. Additionally, Miami’s healthcare system is a major asset. Many don’t realize our Health District is the second-largest concentration of medical and research facilities in the United States, after Houston.

By enhancing infrastructure, education, and healthcare, Miami can remain a top destination for investment and talent. From our firm’s perspective, these improvements will further strengthen the commercial real estate market and create new opportunities.

How can public-private partnerships help address Miami’s most pressing challenges?

While our firm is not directly involved in public-private partnerships, many of our developer clients are, and these collaborations are critical in tackling Miami’s biggest challenges, particularly affordable housing. Local governments and developers can work together through initiatives like the Live Local Act, which has spurred development. Additional incentives such as tax credits, density bonuses, and zoning changes requiring affordable housing set-asides could further encourage construction.

If a project’s economics don’t work, it won’t get built. However, financial incentives or streamlined approvals from the public sector can make development more feasible. Public-private partnerships can help create more attainable housing while ensuring sustainable economic growth.

What are the biggest opportunities and challenges for Miami over the next five to 10 years, and how is your organization preparing to navigate them?

Many of the factors driving Miami’s growth also present challenges. Infrastructure remains a major issue. While improvements have been made, they must keep pace with population growth. Flooding, especially east of I-95, is a key concern, making flood control mitigation efforts essential.

Traffic congestion is another challenge. While road expansion is underway, Miami still lags in public transit compared to other major U.S. cities. Expanding affordable and efficient transportation options will be crucial to maintaining Miami’s appeal.

Property insurance is also a growing concern. Recent hurricanes and wildfires have driven premiums higher, with some insurers pulling out of Florida, reducing competition, and increasing costs further. This impacts real estate values and makes homeownership less affordable, particularly with elevated interest rates.

These factors will shape Miami’s real estate market in the coming years. As a firm, we are committed to staying ahead of these challenges, working with investors, developers, and policymakers to drive sustainable growth. Despite these hurdles, Miami remains one of the country’s most dynamic markets, and we are dedicated to helping our clients navigate its evolving landscape.