Michael Fay, Principal, Avison Young

In an interview with Invest:, Michael Fay, principal of Avison Young, discussed the forces sustaining Miami’s commercial real estate momentum, from migration and international capital flows to the region’s growing role in finance, technology, and innovation. “The spotlight on Miami is real, and it continues to intensify,” Fay said.

How would you describe the current investment climate for commercial real estate in Miami today, and what trends are shaping capital flows into the region?

South Florida continues to benefit from strong net migration from across the United States, particularly from markets such as New York, Chicago, and Los Angeles. That migration is bringing not only new residents, but also companies, investment capital, and fresh perspectives on how to deploy capital in the region. It is translating into sustained activity across office, industrial, retail, multifamily, and new development.

Miami’s geographic position also remains a major advantage. The city is within a few hours of dozens of countries in the Caribbean, Latin America, and South America, and that connectivity continues to support international investment flows. Miami is increasingly recognized as a financial and business hub, attracting interest not only from the Americas but also from Europe and the Gulf states. The combination of domestic migration and international capital is keeping the market highly active.

What fundamentals are driving demand across the main asset classes, and where do you see the biggest strengths or pressures?

A major factor is what I would call flight capital, meaning capital from other countries and U.S. markets seeking a stable and attractive place to invest. South Florida continues to absorb that capital, and it is being reinforced by the growth of industries such as artificial intelligence, crypto, and technology more broadly. Those sectors are helping establish a deeper economic base and bringing new employers, investors, and users into the market.

Multifamily remains extremely active. We continue to see steady transaction volume, ongoing rental demand, and continued development across traditional multifamily, affordable housing, and condominiums. In many ways, the market is still playing catch-up to population growth. There is no shortage of major projects coming out of the ground, many of them with strong branding, amenities, and lifestyle components aligned with current demand.

Office has also performed better here than in many other U.S. markets. Since the pandemic, Miami and South Florida have seen a faster recovery in occupancy and rental rates than most places. That stabilization has supported new office development and renewed investor interest in existing buildings. Retail remains healthy as well, especially destination-oriented and specialty retail in areas such as Coconut Grove, Coral Gables, Aventura, Doral, Palm Beach, and Fort Lauderdale. Industrial is one of the tightest sectors because land is limited, and that scarcity continues to shape pricing, availability, and redevelopment strategies.

How are higher construction costs, insurance structures, and financing conditions affecting the market?

Construction costs remain a factor, but they appear to be leveling off, and in some cases may even be declining slightly. That is a positive sign for the market. The larger pressures over the last several years were higher interest rates and inflation. Those forces weighed heavily on the market in 2022 and 2023 because underwriting became much more difficult when costs were rising quickly and there was little visibility into where rates would settle.

That environment has improved. As inflation has eased and interest rates have become more stable, investors and developers have gained a clearer lens through which to evaluate opportunities. When the market has more predictability, people can price risk more effectively and move forward with greater confidence.

There are always broader uncertainties that can create short-term pauses in activity, especially in a global market like Miami. But the city’s diversity, international connectivity, and long-term growth profile continue to support confidence. Miami is global, and that’s one of our greatest assets. The diversity of people, capital, industries, and perspectives is a major reason the market has remained resilient.

What are the biggest structural challenges Miami still needs to address?

The two biggest long-term challenges are attainable housing and transportation. On housing, the issue is broad-based. It affects workers and families across industries and income levels. As the city continues to grow, there has to be a greater focus on creating housing options that allow people to live and work in the region sustainably.

Transportation is the other major issue. Traffic affects quality of life, business productivity, and the overall efficiency of the region. There is work underway, but Miami will need more effective and more creative mobility solutions in the years ahead. I believe the city could become an important adopter of new transportation models, including autonomous vehicles and other emerging technologies. Looking several years out, that kind of innovation could help reduce pressure on parking, commuting, and urban movement more broadly.

Looking ahead three to five years, where do you see the biggest opportunities for Miami’s commercial real estate market?

The biggest opportunities are tied to the continued expansion of sectors such as healthcare, technology, artificial intelligence, finance, crypto, and tokenization. Miami has the climate, cultural appeal, tax environment, and international connectivity to attract companies and talent in all of those areas. That growth will continue to support demand across commercial real estate.

Housing will remain a priority. The region is going to need more condominiums, multifamily product, and other residential formats to accommodate continued growth. Industrial will remain constrained because land is limited, and that will keep supply tight. Office will continue to evolve, and we are likely to see more new product in select submarkets. Across all asset classes, one of the most important themes will be repurposing. Sites and properties that once served one purpose will increasingly be adapted for new uses that better match what each submarket needs.

What role will Avison Young play in helping connect investors, developers, and capital partners during that next phase of growth?

We are actively at the forefront of many major assignments, development sites, and complex projects across South Florida. Our team is involved in transactions and advisory work that touch many of the region’s most significant opportunities, and that includes both traditional deals and more specialized assignments.

One area drawing considerable attention is the condominium sector, where some properties are dealing with reserve requirements, life-safety issues, and structural compliance matters. Those situations require a nuanced approach, and we are often brought in to help navigate them. More broadly, Avison Young is well positioned to work with new companies entering the market, developers pursuing major projects, and investors looking for strategic opportunities. We are seeing a steady flow of fresh ideas and new capital, and we intend to remain at the front end of that activity.

What is your view of Miami’s transformation, and what’s next for the region?

The spotlight on Miami is real, and it continues to intensify. What is especially interesting now is that the city is not just growing in population or tourism appeal, it is also gaining new industries, new leadership, and new ways of thinking. As new people move in, they bring different expectations and ideas, and that is reshaping how the market evolves.

Florida has benefited from leadership that has generally supported growth and development, and that has helped create an environment where business and investment can continue to expand. Looking back over the past four decades, the transformation of Miami has been extraordinary. I believed in its potential when I first entered real estate, and what the region has become is remarkable. That is why I remain optimistic about where Miami is headed next.