Pablo Vignolo, Managing Principal, The Hype Group

Managing Principal of The Hype Group, Pablo Vignolo, spoke with Invest: about the exceptional success experienced by the commercial real estate industry in South Florida, and how the firm has continued to grow despite trends that have negatively affected the industry across the rest of the nation.

What have been the key highlights for The Hype Group in the last 12 months? 

We are a commercial real estate brokerage company that focuses mainly on investment sales as well as leasing. Our market is throughout the entire state of Florida, with a strong focus on the tri-county area. We are based out of South Florida, with our main office located in Miami.

While 2024 brought its share of ups and downs for much of the brokerage community, our team’s hard work made it a year of significant success and growth for us. We had the best year so far, with the highest volume ever closed in the history of the company and the highest number of employees hired on our team. We’ve expanded to new regions and closed our first deal outside of the state of Florida, expanding our business dealings to North Carolina and Virginia. While some firms faced challenges, 2024 was a year of great progress for us.

What is your overview of the brokerage commercial real estate market in Miami and South Florida at the moment?

The hot topic from a broad viewpoint has been interest rates. If you ask anyone in the commercial real estate world, they’ll tell you that the interest rate environment has significantly affected the industry. We had previously been seeing banks operate more conservatively in lending, and that trickled down into the rest of the market. If interest rates are higher, businesses need a higher yield. To earn a higher yield, companies have to push changes like charging higher rents to tenants or mitigating expenses. We’re also seeing a major trend upward from an inflationary standpoint. Costs for construction, management, and operating properties are all higher, and the effects are felt nationwide.

From a South Florida perspective, tenants and their businesses are doing well, especially compared to businesses in California, for example. Industrial and retail are both strong. Multifamily rents are starting to cool off after growing for multiple years. Despite the national pressures, we are still an expanding market.

How would you describe demand in the residential market?

I would still describe it as a seller’s market, though it isn’t a well-defined seller’s market. Activity is up. Buyers are engaged, and sellers are starting to become more engaged. The pricing disparity of previous years is starting to wind down. Buyers are moving a bit closer to where

sellers want to be, and sellers are starting to become more flexible.
In South Florida, the main drivers are supply and demand. The supply in South Florida is limited. We are in a strategic situation where there’s not a lot of land to build new products. You’re capped on the East side by the ocean, and the Everglades are on the West side, so we can’t push the urban development boundary line too much.
The existing product is what is being taken up by immigration to the city, as businesses are growing, and Florida is business-friendly. Buyers have to compete and meet sellers’ expectations, rather than sellers being desperate to move their product and lower prices. The market is rather balanced, with both buyers and sellers feeling like they’re winning, which is not common across the country.

What are the main opportunities for growth and investment?

Over the last few years, we have observed growth and opportunity in what we call the “value add” side. Our firm specializes in mainly industrial, retail, and land deals. Land necessitates development, and industrial and retail involve the “value add” side. Ten years ago, Miami wasn’t an institutional or gateway city; it was a secondary market. The city has slowly changed over time, and people are finding value today in properties that have been around for decades.

Which types of properties have seen the largest demand?

As an asset class, industrial is completely different between pre- and post-COVID. It used to be the ugly duckling, and no one wanted to be on the industrial side. With the boom in e-commerce through the pandemic, the industrial world has completely changed. We are now seeing a lot of small-bay industrial from 1,000 to 6,000 square feet, and this is the most attractive asset class right now. The larger box industrial buildings are struggling a bit more because we are not known as a distribution hub for larger spaces. On the small industrial side, we are seeing a lot of

growth, with tenant demand and pricing pressures trending upwards.

What differentiates The Hype Group from other commercial real estate companies operating in the Miami area?

Specifically in Miami and South Florida, we are very local. Culture is paramount, and we have a very Hispanic population. Understanding the cultural barriers is key to being successful in this market. Some outside businesses that move to Miami view it as a melting pot full of opportunity, but they don’t understand Miami’s market. Many deals focus primarily on relationships rather than transactions.

What are the primary challenges facing the commercial real estate sector in Miami at the moment, and how is The Hype Group working to address these challenges?

I believe we are seeing a shift in technological advancements entering the industry. The focus on what’s going to be the new norm is something everyone should be aware of and be prepared to employ. AI is a definite new player, but from a data standpoint, data is changing how real estate transacts.

From a seller standpoint, today’s seller has massive exposure to data that was previously unavailable. They know what their neighbors are trading and leasing for. Sellers and buyers are savvier today. This is creating a more transparent environment.

The intangible changes caused by new software like AI cold calls are posing new questions about what the future of the industry will look like and how we need to adapt. Our firm is trying to keep up with these evolutions in order to maintain a competitive edge.

What is the outlook for the real estate industry in Miami over the next two to three years, and how does The Hype Group fit within this context for the future?

Last year was our best year yet, so we are extremely hopeful for 2025. We found a formula that works for us and are working on opening a new office in New York City that will hopefully handle much of our Northeast work.