Beat Kahli, President & CEO, Avalon Park Group

April 2026 — In an interview with Invest:, Beat Kahli, president and CEO of Avalon Park Group, said that while high demand continues to drive development, pressures from elevated construction costs and interest rates are forcing smaller living spaces. However, Kahli insisted that successful development is ultimately defined by social rather than physical design: “We learned over the decades that the most important element of a town, of a development, is actually its soft factors, its running, its ability to create a sense of place and a sense of safety. That’s a lot different than just building a building,” Kahli said.

 How has the development sector changed in recent years?

It says a lot about the region’s growth when people want to not only visit, but stay and make a living from it. And we have seen that as a trend in the development sector, which is seeing high demand. But with this high demand, also comes the pressure of construction costs, interest rates, and labor pressures that have risen in recent years.

I always tell people that when constructing a building, you need to develop infrastructure. That’s a discipline that has challenges, but you have the expertise in Central Florida: engineers, contractors, and others. 

The art of having a successful town is actually a lot of soft factors. It’s how you manage a town. When I look at Avalon Park downtown, which is 100% leased, and then at certain areas, even in downtown Orlando that has a lot of vacancies, I realize that the most important element in development is not so much its planning, engineering, and building, it’s actually the management of the town, creating a sense of belonging and safety.

You don’t do that with brick and mortar. You do that with people. We learned over the decades that the most important element of a town or development is its soft factors, how it runs, and its ability to create a sense of place and a sense of safety. That’s a lot different than just constructing a building.

What are the challenges in today’s economic environment?

I’m coming from a country, Switzerland, where interest rates are near zero again. To take on a mortgage requires a 1% interest rate. Needless to say, when you look back a few years ago here, you could get a 30-year mortgage for under 3%. Now, all of a sudden, we’re talking if not triple, then more than double the interest rate. Also, construction costs haven’t gone down. So, is there a challenge? Yes, there is. But as always, with challenges there are also opportunities, and there are solutions.

A couple of years ago, I was involved with a company, and I had to go to Osaka, Japan. The company booked me a hotel. It was a very nice hotel, not a big flag, but a local, boutique hotel, downtown Osaka. When I went into my room, I first thought that it was as small as a shoebox. I stayed there for three days. When I checked out, I actually thought: “That’s really brilliant, everything in the room is at your fingertips.” Sometimes with hotels here, you feel like you have to walk across the room to get your bag or whatever. You have a lot of empty space.

I think that the move toward smaller spaces will happen to conquer high costs. You have to build smaller living areas. I think that will be the trend. What’s the challenge? Yes, higher interest rates and higher construction costs, but Central Florida, and Florida at large, is still very attractive. Immigration will continue, and people will move into the state. The infrastructure that we have now in Central Florida, all that has happened in the last few decades, makes it a very attractive area to live, learn, work, and play. However, you will no longer have your half-acre lot with your big house and your pool because that’s unaffordable for the middle class.

How are you aligning upcoming developments and community programming?

Very intentionally, because I think the live, learn, work, play model is the key. When I came to Florida three decades ago, the community was a residential area with 2,000 to 3,000 homes and nothing else. People would live there. They would leave their house in the morning, the kids would go to school, and the parents would go to work, all using their cars. During the day, the house was empty.

In the evening, they would come back and just live at their house. But a problem is what we call a single stakeholder: you own your house, but you don’t really know what’s going on in the area or in the neighborhood.

In Avalon Park, in North Tampa, we have mixed-use buildings, we have schools, and we have residential. The Avalon Park constituent is what we call a quadruple stakeholder. He lives in Avalon Park, he has, or the family has, kids going to Avalon Park school within walking or biking distance. 

When you’re a quadruple stakeholder who works in Avalon Park or owns a business in Avalon Park, you play, you go to events, go to dinner, and shop, among other activities, all in Avalon Park. If you’re a quadruple stakeholder, you’re so much more interested in the well-being of the community because you are there 24-7, you are interested in good schools in the community, in good traffic flow, and everything else.