Patrick Mahoney, CEO & Partner, NAI Realvest
Invest: spoke with Patrick Mahoney, CEO of NAI Realvest, to discuss how the commercial real estate firm has thrived in Central Florida despite macroeconomic headwinds and how an international reach has bolstered its success. “We have investors from all over the world looking for property, and everyone wants to come to Florida,” he said.
What have been your key takeaways from the past year?
Our main priority at its core over the past year has been to survive and thrive. Interest rates directly impact commercial real estate, so it’s been difficult. We were only slightly down on the brokerage side, but we are up on our property management side. That combo ultimately gave us one of our more profitable years.
Being in Central Florida, with its strong economy, has been a major factor in that. We pride ourselves on being locally owned with global resources. We have investors worldwide looking for property, and everyone wants to come to Florida.
What are some of the challenges NAI Realvest is navigating today?
One of the reasons we’ve been successful recently is that the volatility in the market has created opportunities. We saw tenants who wanted to renew but at smaller leases and building footprints, and we were able to think creatively to get those places. I expect interest rates to come down over 2024, which will be a big help. Right now, buyers and sellers need to see eye to eye on pricing, but we’re getting closer.
As interest rates dip, we’ll start seeing more transactions in investment sales, which have struggled over the past couple of years.
And while we embrace sustainability as a company, it also poses its own issues. The challenge we run into with sustainability is the willingness of owners to pay for it. We’re still in a market where what our clients pay in rent for office, industrial, or retail doesn’t warrant the additional expenses for sustainable energy production.
How have hybrid work models and coworking spaces impacted NAI Realvest’s approach to commercial real estate?
At Realvest, we have coworking spaces in buildings we lease. Our business model doesn’t put people in short-term office rentals, as we lease full suites. I’m bullish on coworking because it’s a sound model, but I also fear there may be too many in Orlando right now, so we need to be sure it’s not overbuilt. Overall, the return to office has created an opportunity for the coworking space. Most of our clients are working in a hybrid environment and that has remained consistent. If we have any vacancies, they’re under 10,000 square feet, and we’ve had a lot of success leasing them. That has been a definite advantage in this market because the success of hybrid models has necessitated office space downsizing.
How is NAI Realvest integrating technological innovation to create more efficiency?
Currently, we’re utilizing Yardi software, especially in property management. We also use Commercial Café, where all of our tenants can communicate through an online portal. This application lets them input and track maintenance requests and pay bills online. It’s shockingly new to the commercial space, even though multifamily has been doing it for a while.
We’re also working on how we can integrate Al into these communications. To that end, we’re partnering with a company that has created a bot to communicate with our tenants so they can be up to speed on whatever they need. We’re also bringing Al into our financing operations to balance our checking accounts and handle accounts payable. On the brokerage side, we’re working with a partner on a bot to communicate available spaces to anyone with a request.
What is the state of commercial real estate in the region?
I feel fortunate that we are located in Central Florida because, despite headwinds and economically difficult stretches, the population and number of jobs continue to grow. In that way, I’m bullish for a positive year ahead. We have eight new sales associates starting this year because the second half will be explosive, so it’s a good time to get them trained and settled into the marketplace.
