Liam Krahe, Managing Partner, Cohen Property Law Group

Invest: spoke with Liam Krahe, managing partner at Cohen Property Law Group, about the state of Florida’s commercial real estate market and the ways in which the firm is poised to capitalize on impending market shifts and evolutions in technology.

What have been some recent key milestones for Cohen Property Law Group?

In 2024, our firm reached an exciting milestone, managing over $1.5 billion in real estate transactional value. It was a year of tremendous growth, and I’m proud of what we’ve accomplished. One of the highlights was serving as lead purchaser’s counsel for a Houston-based private equity firm. We helped form a fund to acquire more than 20 medical office buildings across the country. I also had the opportunity to represent the owner of a major mixed-use development in Pittsburgh, where we successfully secured leases for over 160,000 square feet of retail space. Another significant project was working with a Washington-based opportunity zone fund, guiding them through the formation process, and helping draft securities offering documents. And, of course, we made some exciting acquisitions in Texas and Florida, totaling over $200 million. It’s been an incredibly rewarding year, and we’re looking forward to building on this momentum.

What trends are you observing in the area of commercial real estate transactions?

The past year has been unique, with a shift toward entitled or semi-entitled projects as developers aim to secure funding. It has been challenging for developers to get projects off the ground due to limited inventory and less attractive cap rates in Miami. Adaptive reuse or value-add projects have been particularly difficult. We represent many developers focused on ground-up strategies, and while finding financially viable deals has been challenging, it has also led to more strategic and innovative opportunities. Our solution has been to craft unique financial structures, strategically incorporating a debt component into the capital stack to enhance flexibility and optimize project feasibility. 

What opportunities are you observing in terms of risk-taking?

We can propose a variety of legal options, but it ultimately falls on project sponsors to seize those opportunities. Developers willing to take on more risk to close deals have been the ones succeeding. Well-capitalized developers have weathered the current economic cycle better. We view this as a unique time to try innovative approaches with high returns.

As legal advisors, we can present a range of strategic options, but success ultimately depends on project sponsors who are willing to act. Developers who have been willing to take more risks to close deals are seeing the greatest success, while well-capitalized firms have been better positioned to navigate the current economic cycle. We see this as a unique time to explore innovative approaches that can deliver strong returns.

Are there any new or evolving regulations that are complicating real estate transactions, and how is your firm helping clients navigate these changes?

A major regulatory change in Florida is the Live Local Act, which many developers, including us, are leveraging to expedite projects. Each developer has a different approach, but navigating these regulations has been a critical focus. Additionally, there is significant discussion around private credit lending, which remains unregulated and uncertain, resembling a “Wild West” scenario. We are helping our fund clients who deploy capital and lend to private borrowers to determine how they need to prepare to deal with impending legislation. Even with the new administration, we expect there to be new regulations.

Could you expand on the effects you have observed in the market from the Live Local Act?

From a developer’s perspective, the Live Local Act is a highly impactful program. Revisions made in the spring clarified lingering questions and expanded its scope, including a reduction in parking requirements. For example, on a project near the Metromover, we were able to reduce parking from 750 spaces to a ratio of about 0.8 spaces per unit, resulting in $30 million in construction cost savings. This change has been significant, though currently limited to transit-oriented development (TOD) zones. Expanding these incentives beyond TOD zones could further help address affordability challenges.

The program has already sparked over 30 projects in Miami-Dade and continues to meet growing demand.

What role does technology play in shaping the future of real estate transactions and legal services?

Artificial intelligence is becoming a powerful factor in both real estate and legal services. While often overlooked in real estate, the industry is ripe for AI adoption. We are in the process of onboarding a new AI program that will ultimately maximize our time and allow us to be more precise.

How are your clients building resilience and sustainability into their real estate portfolios?

Resilience is increasingly important, with many clients approaching it as a risk mitigation strategy. While some do not fully understand their role in contributing to solutions, they recognize the need to address these risks. We are actively working with communities to implement measures that offset risks and enhance resilience.

What are the key opportunities in Miami’s commercial real estate sector over the next couple of years?

Trends are shifting away from branded hotels and condo developments, though waterfront condos remain highly attractive. Permitting for multifamily developments has decreased in recent months, but over the next few years, experts predict that a lot of multifamily inventory will become available. Those starting the development process now for luxury multifamily projects have a prime opportunity to deliver projects at a time when multifamily inventory is going to be needed. We anticipate that cap rates will decline over the next year, and significant capital investments will continue over the next 12 to 24 months.

What are your top priorities for the firm over the next two to three years?

Our priorities include continuing to provide top-notch service for clients and preparing for upcoming multifamily deals. We have several projects in the pipeline, including our own, and remain optimistic and excited about the opportunities ahead.