Podcast - Transforming South Florida, One Development at a Time

Alejandro Arias: Welcome, all. I'm Alejandro Arias, a land use and zoning partner at Holland & Knight here in Miami. My work is centered on helping developers take a project from an idea to an approval in front of city and county commissioners across South Florida. I'm Miami-born and raised, and on this show, I sit down with the people shaping the South Florida skyline.

My guest today is Omar Morales, who was just a panelist at Holland & Knight's South Florida Real Estate Market Update. Omar is the managing director on Berkadia's investment sales team here in Miami. He has been part of more than $3.7 billion in multifamily and land sales across South Florida, from a $355 million apartment portfolio in Broward to this year's Chateau Grove sale in Coconut Grove. He is a four-time CoStar Power Broker and the host of a thriving podcast of his own, Miami Dealmakers, which has ranked in Spotify's top 5 percent of video podcasts worldwide for two years in a row. I know you have interviewed a number of my friends and firm clients. Omar, welcome. Today, you're on the other side of the mic. Omar, to start, can you share a bit about your background and how you became involved in real estate?

Omar Morales: Yeah, thank you, Alejandro, for the introduction and the opportunity. So, yeah, my way into real estate, it started with my father, but on the residential side. So, he was a residential broker, and I grew up basically in the car with him, showing, like, condos and houses. He used to have this – it was funny because I was, like, 7, 8, 9 years old, and I was in his car going from one listing to another. And I'd be, you know, a kid being like, I'm hungry. And he'd always be like, Omar, we don't eat when we work, we eat after we work, you know, and I'm like, all right. So, he very much instilled discipline and work ethic. And, yeah, my father kind of made a business of selling, you know, half-a-million, million-dollar homes. I mean, they don't really exist anymore in Miami because of how much the prices have run up. But, yeah, so that was my first taste into real estate. So, I got my real estate license when I was 18. But then, when I went to school at FIU, I got enamored with the whole, like, investing finance world. I thought I was going to end up in New York to be, like, an investment banker and, you know, do the things. But when I went to go visit New York, I actually did not love it as much as I thought I was going to. And I'm just such a homebody. I love Doral, where I grew up. I love South Florida. I love Miami. And I figured, like, hey, I don't know what I'm going to do exactly, but I want to do it in Miami, right? So, I made the decision to stay here.

And then, when I was graduating college at FIU, I had an internship at a hedge fund that invested in stocks, like global stocks around the world, which was fun and exciting. I learned a ton, but I missed real estate. And then, after two years of working at the hedge fund, I went to go work at a real estate private equity firm that bought and sold multifamily apartments, but they were the actual, like, investors that raised capital and bought them. So, I said, OK, let me go do that because it's sort of the finance and investment world that I like, but with a more real estate kind of umbrella versus just, like, stocks in the stock market. So, I love doing that. And then, through that, I realized that there are actually brokers that sell $50 million, $100 million deals. I didn't know that existed, you know, commercial real estate brokers that sold deals of that size. So, I started meeting a lot of those brokers down here at Berkadia, JLL, CBRE, HFF at the time. And as I got to know them, I realized, OK, I can sort of marry my real estate, you know, call it, like, passion with my sales. You know, sort of, I would call it a gift. You know, I love connecting with people. I love talking. I love, you know, finding solutions to things. So, I switched over from the principal side to the brokering side, now about nine years ago. So, I was probably, like, 23 when I did that. And now, yeah, nine years later, I've been selling land and multifamily properties across South Florida. And it's been a phenomenal ride to be doing that in Miami during this period of time that it's growing so much.

Alejandro Arias: This year in Coconut Grove, you sold Chateau Grove, a 1963 condo building, for about $45 million and then an office building nearby for $62 million, both to the same buyer. This is a redevelopment that's certain to change the fabric of this neighborhood of Coconut Grove. Now, from your seat, how do major developments and investment strategies shape neighborhoods and communities in South Florida?

Omar Morales: I think one of the most exciting parts about working in real estate is seeing that the things you're working on – Alejandro, you can attest to this – when you're doing deals in Doral or for clients across Miami, where one day it's a little warehouse or a piece of land and the next day it's a 350-unit multifamily building where people are having kids, getting married and creating a new life, a whole life. It's fun because you go to work and you meet people and you do things, but then fast-forward and you see your work come to life. So, for the deals that you mentioned, yeah, I think the $45 million deal, it was an assemblage, so we sold it to the same buyer. It ends up being a total of, like, 2.5 acres in Coconut Grove. And, yeah, that my client on one side that I sold a deal for, the Chateau Grove deal for $45 million, he bought it for about $17-18 million. So, like, he made an absolute killing on that. His goal was to develop it, but he just owned, like, just shy of an acre. And, obviously, the more land you have, like, the more you can do. And so, he was looking to try to sell that building or develop it, but it was just shy of an acre.

Then I have another client who bought the 3250 Mary Street office building for about $40 million, plus or minus. We ended up selling it for $62 [million]. Same thing, he bought the office building with the hopes of, like, demolishing it to build something bigger. But he only had about, you know, an acre and change, like an acre, 1.2 acres. So, then I was talking to a developer client of mine, and I told them, hey, if you buy these two properties together, you'll end up with, like, 2.5 acres, almost, of land. And that's, like, impossible to find in Coconut Grove. And whereas, if you look at these two sites individually, you can think, OK, I can build some condos or some apartments here or some condos and some apartments there. If now you're looking at a 2.5-acre site, you can think about way more, right? You can think of a high-street retail. You can think about doing, like, a mini CocoWalk or something like that. So, to your point, I think somebody, you know, in this case a billionaire, coming in and saying, hey, I'm going to spend $110 million buying land here, and that's just the land, then I'm going to go and build a multibillion-dollar project to change the fabric of this corner. And if you see what Related and David Martin have done and, like, Oak Street, Mary Street and Tiger Tail, where you have the Coco and the Sadelle's, like, it's a super-famous corner that anybody who has been to Coconut Grove knows and likes.

And now, you know, my client is going to be creating, like, a mixed-use project catty-corner to that, to really make that corner come to life. So, for me, it's just very exciting to be, you know, a small part in these big developments. I'm sort of just putting two and two together, but it allows me to drive capital to South Florida, which creates these mixed-use projects, like Brickell City Centre, or we were just talking about what Donald Trump did in Doral, right? It used to be just a Doral Country Club, which was, like, you know, kind of, like, not desolate, but it wasn't doing well. Then Trump comes in there, and now you see Ferraris and, like, wealthy people, which also creates jobs. I grew up in Doral, and a lot of my friends worked at the Trump resort. So, they were, like, valet and bellboys and things like that. So, it just creates community, right? And if, at the end of the day, they could also make some money doing that, like, amazing, go for it. You know, like, I'm almost happy that you're making money, in the same way that you're also building community and stuff in South Florida. So, it's super fun to be a part of and just hope to keep doing that for a very long time down here.

Alejandro Arias: Yeah, I think that's one of the most incredible and rewarding aspects of both what you and I do, which is that tangible aspect of real estate that we can touch and see the impacts that you have. Whether, again, it's a multifamily building where people are living or an experiential place where people were enjoying and taking their family out for an entertainment destination. I know you've chaired the Urban Land Institute (ULI) Young Leaders Group and are part of FIU's Real Estate Council, so you're certainly making a positive impact on this community and the next generation. So, what excites you most about the opportunities for real estate to positively impact communities in the future?

Omar Morales: Going back to what you said, I have friends that I've met from the tech world that came to Miami from California and stuff like that, and they've fortunately done things that made them a lot of money and invested in tech and been part of tech companies. But, funny enough, they tell me, they're like, man, I wish I did what you did. Like, our company is a piece of code. Like, I can't see it, I can't touch it, I can't feel it. It's just some code that someone wrote and is just a very profitable piece of code that we're marketing and selling. For us, guys like you and I, we can drive across the street and show our wife, daughter, son, whatever it is, like, hey, we worked on that, right? So, it's super, super cool. Yeah.

Going back to your question about sort of positive impacts in the community and things like that: Yeah, listen, I'm the first in my family not only to graduate college, but also to graduate high school. Both of my parents were teenage parents that grew up in Honduras. And my father was born in Miami, but then moved to Honduras. That's why I'm a U.S. citizen. So, when we moved to Miami – I was born in San Pedro Sula, Honduras – when we moved to Miami, my parents continued to be the best teachers life ever gave me, but professionally, they didn't know. After I graduated high school, they're like, that's uncharted territory for our family. I have no idea. Like, good luck, right? So, I felt like I had to figure out a lot of the professional journey by myself in a lot of ways, obviously alongside people that helped me and mentored me and helped me grow, but I had to go and seek that.

So, for me, being involved with ULI, being involved in FIU's Real Estate Council, it's just a way to pay it forward because I've been fortunate to land where I've landed in life. And when I go speak to younger people, just making them aware of the possibilities of their life, because any kid in a room, guy or girl, can end up being someone that ends up creating a multibillion-dollar mixed-use project in your city, or helps with that, whether it's from the analytical side, the legal side, the permitting side, and it really takes a village to create positive impact in your community, right? Nobody does that by themselves. So, for me, it's just a way to do my part, to inspire people to want to be active participants in their communities, in their environments, because it's, for me, the best way to live life, is knowing your barista, knowing the place you always go grab lunch at, knowing the people when you go work somewhere, pop into an office and saying hi to your clients, colleagues and analysts. And it's just, like, I think humans are social creatures. And, yeah, I love giving back because I want to inspire people to do the same when they have the opportunity to do so.

Alejandro Arias: You know, I think that's one of the great things about Miami and South Florida in general. We're such a significant exile community, and yet there's a lot of foundation that's been built here to help the next generation, whether it be FIU or UM, but the institutions in place that, you know, have geared up to serve and help the next generation of, you know, first-generation or second-generation immigrants. So, you've seen both sides of this market. In 2021, you helped sell a portfolio near the peak, and now there seems to be a bit of a reset in certain market segments. Based on these trends, how do you see South Florida evolving in the coming years because of new development and investments?

Omar Morales: Yeah, I think South Florida has been and will continue to be one of the darlings of the world, really, globally. I should find this statistic, but it's, like, what percent of landmass is Miami or South Florida relative to the entire globe's landmass? I'm pretty sure it's extremely small. And it has attracted so much capital, so much talent, so much community, so many people that I think, even though real estate in every business is cyclical by nature, right now, we will, it's a fact, we will experience some financial pain, investment pain, given the peaks that we saw in 2021 and 2022. But it will create financial opportunities for people that are going to be buying assets that are probably trading below replacement costs, and they're going to make money, and they're also going to buy, for example, a building cheap enough where they're going to be able to invest in the actual building to increase the rents by doing value-add improvements to the property, which then ends up helping the community.

But I do think it's a very exciting time to be in the business, particularly because we saw the 10-year Treasury move 90 basis points in the last 90 days, give or take. It moved 75 basis points in six weeks, and I think our industry runs on numbers and math. That's relatively simple when you peel back the onions. And, yeah, I think there's definitely going to be some financial pain. It's going to create opportunity. But realistically, it's exciting in some ways, right? Because if you think about at least my generation, I'm 32, I grew up hearing about the opportunities, the investment opportunities that people had in 2009, 2010, 2011. And it's funny when you read the tweets on Twitter and stuff like that, that I was like, man, if only I was buying houses in 2009 instead of doing my homework for eighth grade or something like that, you know? And it was just like, we didn't have those opportunities, right? We were in school or something like that, and I think, from an investment perspective, I think the rate increase that we're digesting right now is going to create opportunities for people. I don't know if that will be in 2027 or 2028, but I feel like since the rates started increasing in 2022, it started putting pressure on owners. And I think that that pressure, it was sort of bending owners, but it wasn't breaking. Things were bending, but not breaking.

Now, with this recent rate movement, and we're recording this in October of 2026. So, the movement from August to October and rates in 2026, I think, will finally, unfortunately, have things break, not just bend. But what I love about real estate is that people that go and raise capital or invest their own capital into building a building or renovating a building to hopefully try to make money on it, whether they make money on it or not, that community generally benefits because the building was built and the property was renovated, right? So, like, there's a bunch of condos in our skyline, right? Where the developer made no money on it because he was building it at the wrong time, but he still had to build it, he got his loan, he hasn't built his way out of it, they didn't take the keys back, or the lender finished the project, and, like, you fast-forward to 10 years and you don't realize that, for that developer, that building almost made him go bankrupt, right? But that's the risk that they're taking. But for the community, it's almost like a win-win because they're like, hey, if you made $50 million building it, great. If you lost $20 million building, we at least still have our building and our jobs, right?

So, I think for the community, having so much talent and having so much capital come into the space is just positive. It doesn't mean it doesn't come without its growing pains. Obviously, there's a lot of traffic. Housing's very expensive. But if you can pick what you want for a city, you want talent and net in-migration and capital flowing to it. And I think Miami, South Florida at large, is one of the cities or counties that have that more than anywhere else in the world. So, I think it's just a phenomenal time to be an active participant in, whether professionally or personally, in a South Florida community. And whether that's land use or investment sales or even marketing, right? Like, imagine now you're marketing a $2 billion project because Carnegie Mellon's coming to Wynwood. It's just an exciting time to be here, and I think it definitely pays to live somewhere where there's sunshine, low taxes and happy communities.

Alejandro Arias: And to your point of the as-built buildings already providing value, you know, whether the original developer ultimately is profitable or not, I think – we're recording here from 701 Brickell. I think Brickell is the perfect example of that. You know, when these buildings were built, it was probably in the ambitious stages of Miami 21 that required the ground-floor retail. I remember many times after the global recession, a lot of these retail spaces were empty, and yet now you walk down Brickell and it's a thriving community with a beautiful streetscape, all kinds of dynamic uses and retail uses, restaurants, and it's really come to life. So, these second- and third-generation owners are really making the most of this built-out product, and I think Miami benefits and the residents benefit as a result of that.

So, Omar, thank you so much for joining me and for your incredible insight. Before you go, please let the audience know where we can find you and the Miami Dealmakers podcast, which, in my opinion, is one of the greatest real estate- and business-oriented podcasts available right now.

Omar Morales: Thank you, Alejandro. Yeah, I think the easiest way to reach me is by email, which is omar.morales@berkadia.com. And then you can find Miami Dealmakers on any podcast platform, whether it's Spotify, YouTube, Apple Podcasts, wherever you listen to it. But I'm also available through Instagram, LinkedIn, social media, like everyone else. But, yeah, a pleasure to be here. Thank you for making a part of this. I love working with Holland & Knight. Definitely want to do more things with you. And maybe we can get you guys on the podcast one of these days.