David Fahey, Managing Director, Avison Young

In an interview with Invest:, David Fahey, managing director at Avison Young, discussed client-first strategies, data-driven decision-making, and shifting space demands across office and industrial markets. “Commercial real estate is still very much about relationships,” Fahey said.

How would you describe the past year for Avison Young’s Philadelphia office?
Avison Young is a client-centric company dedicated to understanding our clients’ unique needs and aligning our expertise and resources to not only meet but exceed their expectations. 

This commitment has guided our strategic growth, including the expansion of our team and service offerings. Our property management division continues to experience strong growth, while our project and construction management services have become an increasingly integral part of our operations. In our brokerage business, we have strengthened our capabilities by adding sector-specific professionals. Healthcare has emerged as a particularly active area, alongside several other high-potential market segments.

What industries or employers are shaping demand patterns across the metro, and how are you aligning your services to support them?
Healthcare and life sciences remain key pillars of our business. While the pace of growth in life sciences has moderated compared to two years ago, the sector continues to be a strategic priority. This sustained momentum is fueled in part by Philadelphia’s advantageous location, its relatively low cost of living, and, most importantly, its deep talent pool supported by leading academic institutions.

Life sciences companies increasingly view Philadelphia as an emerging hub, on par with established markets like Boston, South San Francisco, and San Diego. In healthcare, demand remains consistent and essential, driven by the fundamental need to care for people. Institutions such as the University of Pennsylvania and the Children’s Hospital of Philadelphia (CHOP), internationally recognized for excellence in pediatric care, have established a strong foundation for the region’s healthcare ecosystem. As the needs of these sectors continue to evolve, so too does our approach to serving them.

What is your overall read on the state of the commercial real estate market in Greater Philadelphia?
We are currently in a period of strategic anticipation — less a pause, and more a phase of closely monitoring market signals to better understand what the next few years may hold.

Over the past four years, and particularly in the wake of the COVID-19 pandemic, the real estate landscape has undergone significant transformation. In the office sector, uncertainty remains around long-term return-to-work trends. At the same time, evolving political dynamics and emerging federal policies have the potential to influence workplace behavior and impact real estate demand across office, industrial, and other asset classes.

At present, we are operating in a wait-and-see environment, shaped largely by macroeconomic and policy-driven forces.

How is your team helping clients rethink their real estate strategy in the region?
At Avison Young, we have been at the forefront of the adoption of a data-driven approach to real estate. While artificial intelligence (AI) is a major topic of conversation across industries, its true value lies in the quality and depth of the data it leverages. At its core, real estate is an information business — our role is to gather insights from clients about their needs and from the market about current opportunities, then connect those data points to deliver strategic, customized solutions. Historically, limitations in data quality have made this alignment more challenging.

To address this, we developed Avison Young Technologies, a proprietary platform that integrates intelligent software, trusted data, and deep market expertise. This platform enables us to deliver reliable insights that support informed, evidence-based decision-making, rather than relying on assumptions.

Now in its fourth year of development and continuous enhancement, the platform empowers our clients to make smarter, more strategic real estate decisions aligned with their goals.

In terms of development and planning, what kinds of space and asset configurations are aligning with tenant or investor preferences?
That’s a broad question, so it’s helpful to consider it in three parts: office, industrial, and data centers.

In the office sector, evolving return-to-work trends have prompted organizations to reassess the type of space they provide. The focus has shifted toward creating environments that not only attract and engage employees but also optimize the use of space to avoid unnecessary costs. Concepts such as shared workspaces and hoteling have gained traction as companies seek greater flexibility.

Over the past few years, many organizations have either downsized or right-sized their office footprints. Some may now be reevaluating those decisions, realizing they need to scale back up. Ultimately, the goal is to strike the right balance, retaining and attracting top talent by offering desirable amenities, well-located offices, and flexible workplace solutions.

In the industrial sector, the continued growth of the last-mile delivery model is reshaping the landscape. Whereas companies once prioritized massive, million-square-foot distribution centers, today’s expectations for same-day or next-day delivery require facilities to be positioned closer to major population centers.

As a result, there has been a notable increase in demand for mid-sized facilities, typically in the 250,000 to 300,000 square foot range, strategically located near urban areas. This shift is being driven by advancements in technology that enable companies to analyze consumer behavior and respond with greater efficiency. Amazon, for example, has set a high standard in this space through its use of data and logistics innovation.

In the data center sector, it’s important to consider the increasing demand for data infrastructure. In the AI ecosystem, while much attention is given to large language models and algorithmic applications, a fundamental challenge is data storage. Data centers are essential to supporting both AI capabilities and the broader digital transformation currently underway.

We anticipate substantial growth in this area. However, developing data centers is complex — they require significant capital investment, access to reliable power and water, and other critical infrastructure. That said, there is growing interest in assessing land and existing assets for potential conversion into data center facilities. It’s a topic gaining attention across the industry as organizations look to meet rising technological demands.

How do you see the growth of the Port of Philadelphia influencing regional real estate dynamics, particularly for industrial and logistics-related assets?
The impact will ultimately depend on which sectors are expanding and the types of users the port attracts, but there is little doubt that distribution requirements will grow as a result.

How are macroeconomic conditions affecting your clients’ decisions around leasing, acquisitions, or capital movement?
Interest rates are having the greatest impact on owners and developers, particularly those who operate as both. Whether the focus is on new construction, ownership transitions, or acquisitions, the effect of rising rates varies significantly by asset class. For example, a Class A office building is evaluated through a different lens than a Class C office, an industrial warehouse, or a multifamily property, each of which faces unique financial and market pressures.

For occupiers, interest rates are generally less of a direct concern. Their priorities remain largely operational, centered on housing employees, storing inventory, or meeting other business needs. While real estate plays an important role in supporting those operations, it is rarely the primary driver behind decision-making in the same way it is for investors or developers.

What role can regional collaboration play in stimulating real estate investment and economic development in Greater Philadelphia?
Collaboration plays a critical role when companies evaluate where to invest in both real estate and talent. Incentives — whether in the form of tax relief, economic support, or workforce development programs — can be key decision-making factors.

Organizations typically assess labor availability and align it with their operational requirements. When pursuing growth or entering new markets, companies often engage with state and local governments, as well as economic development agencies, to identify locations that offer the most strategic advantages. Incentives that emerge through coordinated public-sector collaboration can significantly influence site selection.

While such considerations may not impact day-to-day operations, they become highly influential when companies are contemplating major expansions or relocations.

What inspired you to support educational initiatives around Greater Philadelphia?
I firmly believe that access to high-quality education should be available to everyone, regardless of background or economic circumstance. Education is a powerful driver of opportunity, and ensuring equitable access is essential for fostering a more inclusive and prosperous society.

As the cost of education continues to rise, institutions must maintain both academic excellence and financial accessibility. Equally important is increasing awareness — students need exposure to a range of options so they can identify pathways that align with their goals and financial realities.

At its core, education is the product. For that product to remain strong, the institutions delivering it must be sustainable and positioned to thrive. Supporting and strengthening this system, while expanding access and inclusion, is something I am deeply committed to.

What are your top strategic priorities for Avison Young Philadelphia over the next two to three years? Where do you see the greatest growth potential?
While the commercial real estate industry continues to evolve and grow more sophisticated, it remains fundamentally driven by relationships. As we expand our service offerings to better meet client needs, we are intentional in how we approach this growth. What differentiates us is our collaborative culture, where teams work seamlessly together to deliver the best outcomes for our clients, with no internal competition.

We seek professionals who embody this collaborative mindset — individuals who are client-focused, team-oriented, and aligned with our core values. Cultivating and sustaining this culture is our top priority, as it serves as the foundation for both our growth and our ability to serve clients with excellence.