Andres Klein, Founder & Managing Partner, BH Investment Group

Invest: spoke with Andres Klein, founder and managing partner of BH Investment Group, about how global forces, domestic migration, and changing work patterns are influencing real estate strategy in Miami. “Years ago, real estate could be underwritten as a local business, even down to a neighborhood lens. Now, you have to start with the broader world, then narrow down to the niche market you want to serve,” Klein said.

How would you describe BH Investment Group’s approach to identifying, acquiring, and developing commercial and residential real estate assets?

Today, the process starts much farther out than it used to. Before we get into the analysis of an individual property, we look at the geopolitical scenario worldwide, because what happens abroad can affect outcomes locally.

Geopolitics can influence costs through tariffs, supply-chain friction, and pricing changes for materials and components sourced internationally. If a market tightens, a trade policy changes, or a supply route becomes uncertain, it can move your assumptions fast. Those dynamics can also create gaps and opportunities. When something becomes harder to execute, the value goes to the groups that can adapt their product, solve constraints, and still deliver.

Years ago, real estate could be underwritten as a local business, even down to a neighborhood lens. Now, you have to start with the broader world, then narrow down to the niche market you want to serve. From there, we evaluate cost exposure, but we also evaluate trends that shape demand, because demand drivers are no longer purely local either.

A major trend is how people live and work across markets now. More professionals can be employed in one city and choose to spend significant time in Miami, even while their work remains tied to places like California, New York, or Chicago. That changes not only where demand shows up, but also how long people stay and what they need when they are here. It changes the profile of the end user, from typical short-term visitors to longer-stay residents who want the city to function like a base.

We also track domestic migration and where capital is flowing. Florida and Texas have been major winners, largely because people and businesses are looking closely at taxes and the feasibility of starting and expanding companies. You see owners and executives relocate, and even when companies do not move fully, individuals often arrive with close advisers and decision-makers. That entourage typically includes high earners, and it raises expectations for housing, convenience, and the overall live-work environment.

When you see that shift, you start asking what Miami lacks and what it needs to meet those new expectations. Infrastructure, mobility, and access to quality schools become more visible constraints, and affordability becomes a bigger challenge. All of that influences what kind of product will work, and what features will matter.

Then we come back to our pipeline and ask what is needed locally. In Wynwood, we had planned a concept centered on food, beverage, entertainment, and restaurants. This year, we changed direction and are moving forward with a 72-unit extended-stay building with a significant office and coworking component. We see a growing need for people to stay in Miami for several months at a time and to have a functional place to work, even if their employer has not opened a local office yet. A few years ago, we were not thinking about that niche the same way, but it is now a practical market need.

What are some recent or flagship projects in BH’s portfolio, and how do they illustrate the firm’s vision and positioning?

One project that captures our direction is a high-rise residential tower we are working on in downtown Miami. I cannot share the exact location yet, but it is planned as a 53-story building with roughly 600 units.

It aligns with the Wynwood direction: micro-units paired with a large amenities program focused on office space. The concept targets two overlapping groups: flexible professionals who choose to base themselves in Miami, and people who spend substantial time here as corporate leadership and decision-makers relocate.

We see rising demand for smaller apartments that are designed around how people work today. The product needs to integrate workspace and productivity support in the same environment, because many people are here without their companies having a full office footprint locally. In that situation, the building becomes part housing and part infrastructure. The amenities strategy is not decorative; it is functional.

This positioning also reflects how the buyer and renter profile in Miami is changing. Historically, a large share of demand was driven by Latin American buyers using Miami as a second home or as a lifestyle base. Now, we see more domestic migration and more people treating Miami as their primary residence or a long-term base. That shift influences unit sizing, leasing strategy, and the types of services and amenities that matter most.

When investing across different property types and geographic markets, how do you balance risk management with the pursuit of new opportunities?

One of the biggest challenges today is the mismatch between how quickly conditions can change and how long it takes to bring a project from start to finish.

You might underwrite a project with certain cost assumptions and projected rents or sales values, and two years in, the landscape can be completely different. In South Florida, we have been fortunate that rents and sales values have often moved in a favorable direction, but we have also been hit with higher costs. That combination can still be difficult, because cost pressure can erode the gains if you are not conservative up front.

For us, risk mitigation starts with underwriting for strong margins so a project can absorb volatility. We generally want to be north of a 25% profit margin to create room for cost increases, delays, and shifts in the market. That cushion matters because projects have to survive more than one version of the future. A deal should not only look good in one optimistic case; it should still work if the market cools, if absorption slows, or if costs rise faster than expected.

We also pursue projects that can work under multiple scenarios. The extended-stay and micro-unit concepts, for example, are designed to serve multiple demand drivers at once, including remote work, longer stays, and executive relocation. If one demand stream softens, another can still support occupancy and revenue.

At a broader level, we accept that risk is not only local anymore. It is connected to global supply, policy shifts, and migration patterns that can change quickly. The balance comes from maintaining discipline on assumptions, building flexibility into the product, and staying focused on what the market is actually becoming.

How does BH approach project financing and capital structuring to support acquisitions, development, and repositioning initiatives?

We have been consistent in keeping leverage low. We do not use much debt in our projects, and in some cases, we pursue structures with low debt or no debt at all. That reduces risk when delays or disruptions occur, because the project is not burdened by heavy carry and financing pressure.

Delays can come from supply disruption, changes in timelines, or broader geopolitical friction that slows deliveries of critical components. If you are highly leveraged and a project slips five or six months, the economics can change in a meaningful way.

By keeping leverage low, we give ourselves flexibility. The trade-off is scale. Instead of doing a large number of projects, we may do fewer projects, but we avoid the scenario where one deal can put the firm in a difficult position. We would rather stay consistent and protect the downside than chase volume.

In a market where conditions can change faster than a development cycle, we see capital structure discipline as a practical advantage. It supports execution, keeps decision-making grounded in fundamentals, and leaves room to adapt when the environment shifts.