Inigo Ardid, Co-President, Key International

In an interview with Invest:, Inigo Ardid, co-president of Key International, shared insights on the real estate company’s milestones, the importance of diversification, key trends in real estate, and Miami’s affordability, resilience, and future growth. “Miami is on an upward trajectory and will continue improving as a city over the next decade,” he said.

What have been some significant milestones for Key International over the last year?

The most significant achievement has been the performance of our existing assets. Despite operating in a high-interest-rate environment, our properties across Florida have performed remarkably well. It’s incredible how resilient the state has been, especially considering the drastic changes in inflation and, more importantly, interest rates.

How has your involvement across multiple asset classes helped you navigate market fluctuations?

Real estate is a cyclical business, and asset classes are cyclical too. Some asset classes can be very expensive at times and much more affordable at others. Similarly, cities and regions go through cycles. While Miami and South Florida are fantastic markets, they’re not the only great places in Florida. Other areas are growing rapidly and offer opportunities to acquire or develop assets at better value than South Florida.

Being diversified across asset classes and locations allows us to adapt and take advantage of opportunities as they arise.

What key trends are you seeing in the asset classes you work in?

The two main asset classes we focus on — multifamily and hospitality — have both slowed down. Hotels experienced a slowdown earlier, while multifamily is just now leveling off. In hospitality, we’ve seen a decrease in RevPAR (revenue per available room). This decline, particularly in Florida’s beachfront markets where we primarily operate, followed a very strong post-COVID peak. While RevPAR has softened, it remains well above pre-COVID levels. In recent months, we’ve started to see some positive trends, which is encouraging.

Multifamily took longer to experience challenges but is now facing headwinds, particularly in markets with oversupply or those on the fringe. Over the next 12 to 18 months, record deliveries are expected across South Florida and Tampa, where most of our projects are located. It will be interesting to monitor how the market copes and how rents adjust during this time.

How has Key International adapted its approach to real estate development and investment in light of the current economic environment?

Developing new projects has become much more challenging. Successful projects now require a combination of factors that are hard to align: low construction costs, typically associated with midrise or garden-style developments, and high rents supported by prime locations. Finding suitable land for such projects is difficult, as many prime areas are already highly developed.

Additionally, banks have become more conservative, requiring more equity for financing. However, opportunities still exist. As a family office, we’re willing to proceed with the right deals, even when market conditions are less than ideal.

For example, we recently broke ground on a 415-unit multifamily project in Tampa. Despite the challenges, such as significant supply in the market and high interest rates, the land is exceptionally well-located, and we remain very bullish on its potential.

How do you foresee affordability challenges in Miami evolving, and what role can developers play in addressing these issues?

Affordability is a huge issue in Miami, and I think it requires a strong public-private partnership. The public sector needs to significantly increase funding to incentivize developers to build affordable housing. At the end of the day, the most effective way to get units built quickly and efficiently is to ensure there’s a profit incentive. That’s the reality of our system — it’s competitive and encourages action when people see the potential for returns.

Right now, the numbers just don’t work to build anything but high-end housing because of rising construction costs. Unfortunately, high-end developments don’t address the city’s needs, especially for the working class. Miami needs to focus on supporting these communities, and that requires meaningful efforts to fund and encourage affordable projects.

Mayor Daniella Levine Cava has done an excellent job emphasizing this issue, but now the focus needs to shift to execution and getting these units built.

What are your thoughts on resilience and sustainability in real estate?

For new builds, resilience and sustainability are being addressed well. However, older buildings are much harder to adapt. The state has made significant progress, particularly with the legislation passed after the Surfside tragedy, but challenges remain.

The reality is that most storm damage comes from flooding, and the only effective solution is to elevate buildings. Many older structures weren’t designed this way, which creates a significant issue. In many cases, these older buildings need to be torn down and rebuilt to meet modern resilience standards.

While these efforts are essential, they’re also expensive and have already led to increased HOA fees, which we expect to rise further. It’s a painful but necessary process to ensure the safety and long-term viability of Florida’s building stock.

Are there any new projects in the pipeline that you can share?

We’re working on several exciting projects in Miami. In Brickell, we’ve partnered with 13th Floor to develop a large condo project on a church site. We’re also working on a multifamily development in Edgewater, which we’re very enthusiastic about.

Additionally, we’re in the approval process for ultra-luxury condos at the South Beach Marriott, located South of Fifth, right on the ocean. That’s a project we’re incredibly excited about.

Another major project is the 700,000-square-foot office tower in Brickell, which we’re developing in collaboration with Sterling Bay. These are all significant projects, and while they’ll take time to bring to fruition, Miami is a city where patience pays off with great results.

What is your vision for Miami over the next decade, and what role will Key International play in achieving that vision?

Miami is on an upward trajectory and will continue improving as a city over the next decade. Of course, there will be bumps along the way, but the overall trend is positive. However, it’s important to ensure that success is shared as broadly as possible. Not everyone has the skills or resources to thrive in a rapidly evolving city like Miami, so it’s crucial to support those who are at risk of being left behind.

Affordable housing is a critical component of this vision. While we contribute to affordability by adding inventory, since any increase in supply helps alleviate pressure on rents, it’s clear that fully affordable housing projects are a more targeted solution. While Key International hasn’t traditionally developed affordable housing, we’re open to learning and contributing to this field. It’s vital to keep Miami vibrant and accessible for as many people as possible.