Mike Pappas on Miami’s Real Estate Long Game

We chart Miami’s journey from a 1926 hurricane launch to a global finance hub, and how discipline, density, and demographics shape values. Mike Pappas shares cycles survived, why CCIM skills matter, and the long-game moves that keep firms resilient.

• Keyes Realty’s origins, leadership transition, and growth strategy
• CCIM as the language of real estate and decision framework
• Owning real estate to stabilize a brokerage through downturns
• Lessons from cycles: 1981, early 1990s, and 2008 to 2011
• Miami’s post‑COVID inflows, land scarcity, and density premium
• Office recovery, construction costs, and negative leverage risk
• Affordability pressures, regional shifts, and micro‑CBD growth
• Conservative debt, swaps, and cash flow discipline
• Street‑level prospecting, database rigor, and client motivation
• 2030 goals to double volume and expand commercial platform

www.keyes.com

Thanks for joining us on CRE Cafecito, the CCIM Miami Podcast where deals, insights, and Miami flavor come together. 

For more information on CCIM Miami District please visit:

• CCIM Miami Website 
• LinkedIn
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You can find Ruben the Cuban on LinkedIn.

Transcript

SPEAKER_00 0:00

Hello, hello, hello, and welcome to today's episode of CRE Cafecito, CCIM Miami Districts Podcast. And today's a very special day because we have Mike Pappas, the one and only from Kai's Realty, and Tony Puentes that is going to be here. We're going to be talking about Miami, talking about a little bit of the landscape and kind of seeing the future and getting some history on the events that you've seen over the decades of been in the business and so forth. And so Tony, you're going to uh take the take the reins here and kind of lead us through this, and I'll interject from time to time. But with that said, welcome

Welcome And Rainbow Over Miami

SPEAKER_00 0:40

and thank you for being here and thank you for sharing with us. We have people listening, not just locally, but we have all the way out to like Singapore and so forth. So shout out to those folks out there. They're sleeping right now. They're sleeping right now.

SPEAKER_04 0:53

Good morning, good morning, good morning. Uh you know, as we're sitting here in the conference room of the Kai's offices in Miami, Florida, we're looking out the window and there's a beautiful rainbow. Yeah. What a better way to start the morning, and obviously this incredible group of uh individuals that are that are before us here today. Mike, I uh thank you very much for for coming today. For we kind of volunteered you, so thank you for accepting. I'm proud to be a CCIM. The the reason the reason you're here is because some years ago, and I've been involved with the organization of the conference and been involved with CSAM for a long time. And every time I thank you for your leadership.

SPEAKER_01 1:25

It's not easy for whoever's listening, but Ruben and Tony stepping up. It takes a collective group to be able to accomplish that. So my hands see you.

SPEAKER_04 1:51

But I want to thank Sonia Diaz, who's here with us today, too, one of your top managers and top sales. She is extremely involved with us at CCIM. As soon as we started talking about individual names, and yours was right there. She said, Oh no, Mike's got to be on this. And I was like, you know, yes, you know, and I'm I'm born and raised here in Miami, so I've known the name Kai since I got in the real estate industry.

SPEAKER_01 2:14

Correct.

SPEAKER_04 2:18

Us local folks understand it and and and we say it right. And uh it's amazing what what you've done, what the company's done, and and and you know how you've maintained your identity and you've maintained that that name and so forth. So again, I just your career is legendary, Mike. The Kaiser organization has been able started, and and I and I read a little bit more about it just to get a little more familiar. It seems like your founder started this in 1926, but there was a huge hurricane that year. That's amazing.

SPEAKER_01 2:47

That was uh how would you like to come to Florida in the land boom, hoping for the promise of the future, start the company in February of 26, and the biggest direct hit of a hurricane on downtown Miami was September of 26. Wow. So it sent him and the whole region really into the depression. The Biltmore Hotel had just been finished. It was built in 11 months with George Merrick.

Kaiz’s 1926 Origins And Surviving Storms

SPEAKER_01 3:11

It sent him back penniless eventually, and he lost really control of Coral Gables because of that. So you got to give him and those individuals a great credit for managing through the Great Great Depression and then seeing the boom after boom and the movement coming forth that we've seen over the last hundred years. We're celebrating our hundredth year this year, so it's quite feat and for Miami with the cities and everything else. If you know anything about it, there wasn't much before that, um, except for mosquitoes and the Deering Bay or the Deering Estate in 2013 or 1913.

SPEAKER_04 3:44

Amazing. Amazing to start and and to look back now and the success you've had. But let's talk a little bit about you individually, right? I see you went to Wake Forest, tremendous school, and I noticed you majored in business, but also in Spanish.

SPEAKER_01 3:58

Yeah, that was a good thing. I I actually went to run track there. I I went to a little, went to Westminster Christian High School here. Great won some state championships in the track. I played, you think you're a better athlete than you are, because it was a smaller school. And so I ended up going to Wake on a track scholarship and got there, and you had to take a language because it was a liberal arts school. And I'm thinking, like, oh my gosh, I have to take a language again. I might as well take Spanish. Make sense. And there was a professor from Salamanca that just was figured I was from Miami, and he said, Mike, you're going with me to Spain. And I thought, well, I'll get out of that. I'll call home and we'll study abroad. And I said, My parents won't let me go. And I called home. My parents go, Great, that'd be a great adventure.

SPEAKER_04 4:41

You know, forward wine, forward wine till today. I was reading an article the other day. There is the most amount of individuals from the United States, a lot from Florida, that are trying to get their second passports in Spain. Spain is the new it.

SPEAKER_01 4:54

Yeah, no, I was I studied in Madrid. So you were there early? I mean, Franco had just died. I mean, that's showing you my age, and and I always look back to that professor. Oh, the good lord. I have a faith, and it guided me, and so it gave me a foundation where I could communicate in Spanish in the early days.

SPEAKER_04 5:10

So you graduate school, your family is running the Kai's company. What are you thinking?

SPEAKER_01 5:16

Yeah, I I always was a kid that sold things. We sold cakes, we sold stuff, we raised money. I actually, before I went to Wake, got in involved with a Southwestern Book Company, which is a door-to-door book company from colleges. I was visiting a pastor up in Tennessee. In fact, he just wrote me regarding the Florida trend. He's kind of retired, and I signed up for Southwestern. I found myself at 17 in Wichita Falls, Texas, without a car, knocking on doors for that summer after college, after high school before college. And so I always thought I would go into sales, obviously, with the benefit of uh my father. And so I started as a salesman in our Fort Lauderdale office in 1980. That's amazing.

SPEAKER_04 5:58

Time flies when you're having fun. So you get so you get the Kai's, you get involved. I'm sure you start as a as a as a junior sales individual working with maybe some of the senior guys. How do you get to Yeah?

SPEAKER_01 6:10

Well, I was, I mean, I'm an SOB, which is the son of the boss, so I I realized that I realized the certain benefits, but also challenges. Right. And my dad, looking back, he had gotten into the syndication business in the 80s, kind of lost the focus of the brokerage. There was an onslaught of national firms coming on at the first

Mike’s Path: Track Star To Broker

SPEAKER_01 6:31

time, buying up companies. And so we were, and he was stuck in a model that was a 50-50 split, and the things were changing. And so I was when I was coming up through the 80s, managing and and starting to sell, I was selling and managing and doing commercial. I I realized that we were kind of not moving forward. Sure. And he was ready for a change. And so by the early 90s, there was a recession there. I went to him and I said, We we were getting beat up. I said, let's make a change. And I went to actually the CFO and I said, I want to buy my dad out. And the CFO goes, Why? And I said, What do you mean? He goes, Well, it's a tough business, and it's changing, and there's a lot of agents and everything else. It says, All I want. And my dad was very, very nice at that time that he gave us a leverage deal. We did it over time. And then he became a mentor and coach. And so it was a great gift, but also with a lot of responsibility.

SPEAKER_04 7:26

Excellent. Well, very good information. So you're on your way, you acquire the company or a piece of the company, and where do you go from that? We know where you're sitting today, and I'm gonna go ahead and give a few tidbits of information I learned. I think you've acquired over 75 brokerage firms over the years. You've never sold out to anybody, which is what most people end up doing. I think your numbers are more in the $8 billion in sales. You know, what happens in the 90s and how do you start that process?

SPEAKER_01 7:57

It's interesting because we did get offers and we did get people saying what they sell. And when I was younger in my 40s or so, there was another at the end of the 90s, in the beginning of 2000, there was Berkshire Hathaway was consolidating, Caldwell Banker came back into the market, and they were buying up everybody. And we looked internally, and my father even said you ought to talk to him. And then you start looking. There was really a man, he was the CFO of Knight Ritter, went to my church, Bob Singleton was his name, and I went down and I said, Look, they want to buy us. And he said, What would happen? I said, Well, they want me to move to Sarasota and run Florida. He says, Then what would happen? I said, Well, maybe I'll end up in Persephone. He says, Then what would happen? I said, Well, I'll probably come back to Florida. And he says, Then what would you do? I said, I'd probably open up a brokerage. He goes, I'll save you 10 years. Are you making money? He's fast forward. He says, Stay where you are. They eat you up, burn you out, and chew you up. And so I I think at that moment we said, if we're going to compete, then we've got to rechange. And Ron was there, Ron Yanks is our regional manager for Dade County and Broward. And he remembers saying we had to become one, two, or three in the marketplace. We had to rechange our commission structure. We had to relook at the deal. We had to add mortgage title insurance. So we really went through a strategic planning process. And now I'm proud to say that we sell more real estate in South Florida than any other brokerage firm. We did about 20,000 units last year, this year, and for close to the $8 billion, we're off a little bit from the peak of the COVID, but it really is partnering with great people and understanding our value proposition, which is a community that a company that cares, putting the agent first, and then really trying to support them in maximizing their full potential in what they do. Excellent.

SPEAKER_04 9:43

So my story, I graduate college, I start, I get a tremendous opportunity with a large developer out of New York, Tishman Spire properties.

SPEAKER_01 9:54

He's a big company.

SPEAKER_04 9:54

Yeah, and Jack Law at the time was the regional partner. And he hires me as a, yeah, yeah. Super grateful for the opportunities they gave me. They he hires me, they hire me as a marketing research individual. Actually, I was still in my last year at FIU, and you know what a great door was open for me to go in there, start working with senior brokers and really understanding the market and how to research, right? Right. We were just talking earlier off offline how you know the technology and AI is changing how we do everything. But back then you had to walk the buildings, show the buildings, take pictures, look for articles, and then report back to your senior brokers.

SPEAKER_01 10:31

I think there's still something that everybody listening to, you better go see, show up, get the data, even though you're getting it all. This isn't a tech business, this is a personal relational business, and knowledge is king, but you've got to have the experience of dealing with the product on top of that. And that's what they can smell and sniff those that know and those that

Buying Out Dad And Reinventing The Firm

SPEAKER_01 10:52

are.

SPEAKER_04 10:52

Makes a big makes a big difference. So my exposure to CCIM was really because back in the 80s and 90s, there was very few colleges that were educating real estate as a formal process of education, right? You can you can take maybe the sales class to take your state test and so forth. But other than Florida State, and I'll give them credit because they started way back in the days, there was nobody around the country that had a Hap Pomrance was uh one of our top guys.

SPEAKER_01 11:20

It was a Florida State real estate graduate in 1979.

SPEAKER_04 11:24

And uh Yeah, and I'll give a shout out to Donna Bood and our local very you know, she's she's a big flag waiver and she's uh very successful. Yeah, yes, yes. We got to get her to the conference. So I'm exposed to C Sam and I realized that as I'm getting into the business, I really didn't have a real estate background. So I was exposed to this organization that was, you know, willing to give me you know four or five incredible classes to take and really learn the business. And then along with that came the networking and the technology and and and really what you needed to understand and be able to deal with individuals at a at a pretty high level. So I get in in the studying part of C Sam in the 90s, I get designated in 1998, and it's really been a big part of my success. And and and I've stayed with it mainly for that, and also just the people that we continue to meet and help and so forth.

SPEAKER_01 12:14

I I I I've got the CCIM in the 80s, and that's I got a business degree. I obviously had the Spanish um degree also. But the the uh I tell people it's the MBA of real estate. And and you do that 101 class and you understand the numbers because underneath every deal is the financial model.

SPEAKER_04 12:32

So I'm gonna I'm gonna up you one on how CCIM has been most recently representative where the language of real estate. There you go. Very good. But the MBA of real estate was used for a lot, it is still used also in.

SPEAKER_02 12:43

It shows you my age.

SPEAKER_04 12:47

So tell me a little bit more. Sonia, who's here with us, is also very involved, you know, in CCIM and so forth. How how did CCIM help you grow your business, grow Kais, maybe pass that on to your because we're gonna talk a little bit about legacy here. Your daughter's doing a great job and playing a huge role now in your company and in our community.

SPEAKER_01 13:04

Well, we we say if we were talking about this earlier about companies that own the real estate that are running a business seem to do outlast those that don't. And and so my father never bought real estate. He was growing the business and he didn't like debt, so you're not gonna be able to buy real estate if you don't put debt on it. He said he didn't want the pressure of the banks coming after him and doing everything else. And so we obviously had a platform that we could buy, but what it allowed me to do was for my own self to understand the math and be able to look at deals and be able to buy and acquire. And that's really been a channel for us that's helped us be able to expand the company and give us the resources and the value in the downturns. We've had to sell some of them in the 08s, you know, to prop us back up to make sure that we keep the business alive. So it was a balance between owning real estate and running a brokerage that I think that combination gave me the strength. And I got that through the CCIM. The first property I bought was with the other CCIM guy, what our our our manager of Ray Barquette. And in 1988, I bought a property in Fort Lauderdale, an old 10,000 square foot warehouse off of Oakland and Andrews with Ray, and we just sold it. He passed away. We just sold it a year or two ago. So it was a 40-year run of, you know, of holding and watching all ships rise. And if you did that in South Florida and you do that, there's no question with the demographic shift prices. We're talking about $1,100 a foot coral gables prices, that was be shocking yesterday, but are they going to be $2,000 tomorrow? You know, people won't believe it, but it will be.

SPEAKER_04 14:45

Yeah, along those lines, I had a developer probably 10 years ago that was more a multifamily residential developer, and he wanted to transition a little bit into the commercial world and the office world. And he used to challenge me on that. You know, why do you tell me office buildings are worth back then $300 per square foot, and I'm selling condos at $1,500 a foot, right? And fast forward now 10 years, and he's right. He was right. I I had lunch with him the other day, and and I told him, you know what? I never forget you told me that. But yes, like why are the office condos, and there are some very successful, a couple of successful office condo buildings in Corgables and and Brickle that are that are you know pushing values and so forth, and there's a need for them, and there's businesses that that is part of their business plan. And those numbers have doubled and tripled here in the last 10 years. So sometimes the resie guys know what they're doing. I'm a commercial guy, but exactly right.

SPEAKER_01 15:37

Well, the number, the rent's got to match the income, and that's always the dilemma. And you know, an office, the cost and the cam and the carry of an office building. Look at when you were started, it was probably 10 bucks a foot, 15, and now it's 40. Or I mean, so that again, the 40 just to pay the bills, now I got to get the net rent on top of that at $30, $40. I'm up to $70, $80, $90 a foot just to make it work. And then that values a cap rate based on that value. Well, you all know, and everybody knows the numbers, and that in a sense creates value.

SPEAKER_04 16:10

So before you go a little bit to legacy and and and looking forward to the future of Kais regarding management and so forth and and Christina, give me some tidbits for the audience on some of the cycles you've seen. I mean, how many individuals are sitting in your chair that

Strategic Pivot: Scale, Services, And Market Leadership

SPEAKER_04 16:25

can look back two or three cycles?

SPEAKER_01 16:26

And where are where are we? There's there's it's it's it's a it's a roller coaster ride of South Florida and it's a boom bust because of development historically. You talked about the condos. I've seen three condo. In fact, the first condo I bought in 1980 out of college in Fort Lauderdale, I sold at a loss. And my wife says, I thought you knew what you were doing, because they weren't, you know, you know, that was like 80, 81, 82. So you see the overdevelopment, the prices rise, and then they come back, and then they come back. So so I think along the ways, we saw the 81 downturn, we saw the 92 downturn that when we did the deal with my father. And then the doozy of all doozies was the 08 to 11 that really was a wipeout of everybody. That if you had any debt of any size, then you're that one hit hard.

SPEAKER_04 17:14

That one hit hard and hit everybody. Right. Right.

SPEAKER_01 17:17

And the the 91 was the syndication issue, where again, we talked about that earlier, is is when you, Tony, when you uh have a financial benefit that's not based on the only the real estate. So the syndication deals were getting a one-to-one write-off on the discounts, and and then we talked about the EB5 and some of those now where there's opportunities where people came in, they didn't really know the numbers, but they were raising money to get the visas. So those are the those are what I call the opportunities for the brokers to see the weakness in the in the system to be able to say, uh-oh, there's some pain there, and now I gotta help them sell. And people won't, they'll sell for pleasure or pain, but pain motivates them a lot better than pleasure. Your involvement in the community has been we've been in the residential, you haven't seen the commercial, we've been in a really, I think, a little recession residentially unit-wise, for we're only selling four million homes a year. We that was the number we sold in 2008. They sold four million homes a year in 2008, and we thought it was disastrous, and we're only selling four million. The price has saved us, so we've gotten double, triple the price, so that's kind of making the pain a little less painful. But we think when you look back from 2010 to 2020, the average number of home sales in the U.S. was 5.2 million. So there's a it's a 30 percent down from an average of a decade ago. So there we think we're starting to see sprouts of increasing the the loan lock rates are kind of getting old now. People can't stay in their homes, life moves on, you know, their marriage, divorce, yeah. The real real benefits, they have to move. And so we're starting to see a loosening up, more inventory coming on and and more deals being done now. So focus rate helps a little bit.

SPEAKER_04 19:01

Sure, sure, sure. So so focus on Miami, South Florida, you know, post-COVID, the COVID era.

SPEAKER_01 19:10

Yeah.

SPEAKER_04 19:11

You know, and and also looking back, you know, Miami always has been a little resilient to and immune to certain things that have happened around the world or or events and so forth. But this time around, it seems like it just happened again and even more significant.

SPEAKER_01 19:24

Yeah, I I think if you're from Miami and you're living in Miami, my dad picked Miami. So again, I'm grateful. I say it every day. Um, why'd you move from Michigan? And he said it was always cold. I had blue lips in August, and it was always gray and overcast. And he and I don't think we realize the weather, the ambiance. I heard uh three billionaires in one day. I'm involved in a YPO Young Presidents Organization. I heard a guy his name was Bruce Berkowitz. He was Fair Home, $9 billion fund manager, moved down about 10 years ago, and he said, maybe pre COVID, he says, F and F. Financial and fun. He says, New York, you're going to get the Wall Street down to Miami. You're going to get Dubai taken away from London. And you're going to get Singapore taken away from Hong Kong. And I look back 10 years later, 12 years later, going, dang, he was right. So the financial fun, we do have a fun environment with the water, with the environment. I mean, it is an eclectic place because of the Latin culture, because of what the transitions we've been building on, we really are what I call the new modern city. And when I was a kid, we used to be like Columbus, we've seen priced like Pittsburgh. And we're going like, why is it in New York and San Francisco and DC? We're there now. And but then you got to start comparing us to Tokyo

Why CCIM Matters: The Language Of Real Estate

SPEAKER_01 20:44

and Paris. And you think we are expensive. We may be, we may be at the top tier now for the states, but we're still cheap when you look at Mexico City. You go around the world and start looking at real dense places. And so, bottom line, where are we for the future? I always say it's 118 miles long from Jupiter to Homestead and it's 20 miles wide. You know what another place that looks like?

SPEAKER_04 21:08

That relates to the ocean.

SPEAKER_01 21:10

Yeah. The other place is Long Island. Sure. It's 118 miles from New York City to Montauk and it's at 20 miles wide. They have 8 million people. We have 6.5 million. Let me ask you who's going to win. And so if you get demographic growth, you will get increase in prices. No question about it. Don't go to Toledo, Ohio, and think you're going to get appreciation. You know, because people are exiting and leaving and there's a lot of land. But when there's limited land and demographic growth, and now with tech and with the financial movement and the even the South and Central American, that I don't know what our plans are with this government, but it seems like there may be some focus on that. That'll even open us up more if we're going to a regionalization because we are the capital of South and Central America.

SPEAKER_04 21:56

And a lot of a lot of tidbit. I always get a lot of uh of credit to to our forefathers of of South Florida, Miami, and your father included, and because they had a vision. Oh my. They built the seaport and the airport. First of all, they planned it probably in the 50s and 60s. They built it in the 60s and 70s. What were they thinking? Yet now there's no room for them. Like they're they're overcapacitated, right?

SPEAKER_01 22:19

So my dad used to say that you'll never get an airport built today, downtown Miami. The regs, the Fed, I mean nobody would let that happen. But it's right there, right in the center of town. And we were just in Miami Springs, and you're starting to, I'm thinking, like, that's a throwback in time. You talk about opportunity there, but now it's trapped because of the lang, the lot, you know, so there it doesn't get in, but it seems like it's ripe for who would have fought when win would and the design center, I mean, 20 years ago. I mean, all of that. So so we're running out of land, and so you're going into those markets that you're starting to see increases. So we are becoming a premium. We are. I mean, my dad, your dad, they would have dreamed about this, but reality is here. And so where do we go from here? We got transportation issues. I just saw where you can fly now a heliport for 200 bucks, maybe from Miami to Palm Beach. I've been waiting for the Jetsons to come around all my life. So you start getting, I mean, driverless cars and being able to get up in the air, that may solve a lot of the problems. But but but there is some excitement, so we'll see.

SPEAKER_04 23:27

So your top three reasons why you think the wealthy are finding their way to Miami from around the world.

SPEAKER_01 23:33

Yeah, I I think it's w originally it was a safe haven from South and Severn and Central America to put money here in case things went bad there. Then they started realizing there was a culture and a connection here. They moved their families here, you know, in the 90s, 2000s, and we're seeing the same thing of the Northeast. Originally it was a playground for the rich and famous. Now, because of taxes, because of the benefits, because we saw in COVID a clear delineation of business run states and non-business run states, and it attracts people from a tax benefit and from an operation benefit to say, hey, uh, and they're choosing to come here now from California. I used to always say C A L I F was come and live in Florida. I never saw them come, but they're coming Chicago, they're coming and New York. But it's more of a conservative bunch that's coming because they're looking for this type of um environment and government. We've seen the sales tax drop. Yep.

SPEAKER_04 24:36

I mean, that was the realtors were a big part of that. Yeah.

SPEAKER_01 24:38

I mean, that was I mean Christina, your daughter was involved in that. We own 50 offices and we own some buildings, but they're outside. We were paying tax against ourselves and saved us hundreds of thousands of dollars. And and we were only one of three states that had that. And so there's a lot of good happening.

SPEAKER_04 24:54

And it doesn't hurt. We all woke up this morning in in uh December 2025, and the weather, the weather was pretty nice.

SPEAKER_01 25:00

And you got the I mean, the bay and the water, and we talked about with Ruben, Cuba. I mean, once that opens up and the the the islands and the Bahamas, I mean, we're it is a pretty exciting spot to be here. And so if you the catch is we are pricing people out. And so the the dilemma is the K economy where

Owning Real Estate To Stabilize A Brokerage

SPEAKER_01 25:20

the rich are getting richer and the and the and the service environment is getting strained. So we are seeing salmon moving upstream, people selling their Kendall home for $800,000, buying in Port St. Lucie for $400. But that's only two hours away, and we are a, you know, a mobile uh society, and so people are choosing where they can afford and where they can live. Now the catch is who's going to replace that. And we have strains on schools and the private schools, the charter schools. I mean, there's there's a lot going on. The $8,500 makes a big difference that our state's doing to give people choice, but that's also putting strain on the public school systems accordingly. So, you know, we're we're in a transition. What I think is we're here. Now the question is, what are we going to do with here? And can we manage here well? And I think if we do as a community, we could be there and to really be one of the premier great cities.

SPEAKER_04 26:19

Yeah, no, all good points. And these are some of the challenges that that are part of growth cities, right? And including our infrastructure to a certain degree, our our traffic, the density of our traffic. What uh what what what do you do with what do you do with that? You know, do we build more metro rail?

SPEAKER_01 26:32

I'm just I don't know. I just we just sold, I just saw um a family um get $120 million of their farmland and homestead. So I think those farmers are happy. And then the other people that's probably agricultural zoning. Yeah. And and so you're you're starting to say, okay, well, that so that's the last bastion of development. So you know, I think you what you're finding is communities like Durral, downtown Durral. You know, I mean you're seeing more of the neighborhood communities finding their own community to make it. In in Brouwer County, uh there's a metropol um metropolis that's trying to get built, which is like a high ride west market. So I think you'll see more of those where you're gonna vertical a little bit more into the suburbs because they it's a more affordable land's cheaper. Why is the land again? Let's go back to our CCIM days. Why is an acre downtown because I can frickin' put an 80-story building where I can only put a three-story, four-story out there, and what's the rents that go accordingly? So beneath it all is the land, and and that dries value. And so I think it and I'm not sure you and I'm not sure.

SPEAKER_04 27:40

I think that's been the secret sauce to South Florida for a very long time. You know, the the land and the value of the land just historically has always gone up. I mean we've had we've had blips throughout the process, but if you go back long enough, it's it's always a forward uh I'll tell a story.

SPEAKER_01 27:52

I I've used it for 30 years. There was a guy that owned a bunch of Burger Kings in Toledo, Ohio. Miami guy got the franchise in the 60s when Burger King was coming on, moved to Toledo, local Miami guy, and had 20 Burger Kings in Toledo, 20 owned all the real estate, and he wanted to come back before Polio Tropical. So when I was selling in the 80s, I picked him up. He had a 75-foot boat. Bob um, I'm trying to think of his name. I'll think of his name in a minute. Um, and he and he was trying, he said, No, I'm gonna open up a chicken chain like polio local or something before Polio Tropico. And but I gotta own the real estate. I took him out to Bird Road, it was an acre and it was like a million dollars. He goes, I can't afford a million dollars for this thing. I said, Well, we got the demographics, it'll work. And he never bought. And when I asked him, I said, he says, I should have never left Miami. That was the line. And I said, Well, why did you say that? And he I said, You got a boat, you got 20 burger. And he says, he goes, ask me what I paid for the land in Toledo. I said, What'd you pay for the land? He goes, eight bucks a foot. He says, That was it worth today. He says, this is the eighties. You'll like I'll finish the story. He says, he says, ask me what it's worth today. I said, what's it worth today? He goes, eight bucks a foot. He says, a lot of land, no people. I got on this YPO run, met some Toledo guys. I said, Do you know this, Bob? He owns the Burger Kings, he's died, his daughter's taken over. I said, What's the land worth today? Eight bucks a foot. So if you don't get the density, you don't get growth. And so we've got the density and we get the growth.

SPEAKER_04 29:18

So let's uh let's get a little more specific on product types a little bit. Obviously, you you know, your your office has a pulse, you know, second to none and so forth. And I know you do residential, you do commercial, you do sales, you do leasing, you know, we have all the food types, you know, office, industrial, retail, we have residential, we have multifamily. Any tidbits you can give us there on where we're going with this and and and what where are we today? Where are we today?

SPEAKER_01 29:45

I think we've died. I think you mentioned COVID. We we were fortunate, unlike Chicago, unlike San Francisco, and in somewhat New York, where they aren't seeing the in the income or the people coming into their cities where we are, we kind of actually have set new standards. You talked about a $200 a foot price per square foot on brickle, which is unheard of, but $150, $100. So because of the influx and the limited product type, we didn't see what they're seeing with the change in the office products and type. So that's good for us. And now the cost of construction, which you mentioned, is now six, seven hundred, eight hundred dollars a foot to go high-rise. So that limits that also. So we're gonna see a redo of some developments. So where the squeeze is, where the opportunities are, and we talked about that is the five-year balloon payments on commercial loans. And so those that got under the three and four percent now are getting six, seven percent. Residential, we're not seeing increases of rents anymore. We had a heck of a run for the last decade. Rents went up, up,

Cycles: From 1981 To The Great Recession

SPEAKER_01 30:55

up, up. They're building better products. You know, you're getting $2,500, $3,000 a foot, I mean, a unit where it was originally $1,500 a unit. You're not seeing that anymore. So we're st we're starting to press against affordability. And so where the the user can't pay more, and he's paying 40%, 50% of his income to that. So we are, I did see gains coming up in salaries for the first time against pricing that is not, but we've got a the bubble of COVID outreached and outran the norm. So we're digest so where are we residentially? We're digesting it. And I think commercially, can businesses pay for the rents we talked about and the retail and the rents that people are demanding. I've got to run a bigger store. And you've got internets and Amazon, and so now I'm dealing with personal type retail things. How much revenue can I bring in from a nail salon and from a haircut place? And so those are the dynamics that I think a business can only pay so much, and so that's the strain. And then cap rates, you know, South Florida hasn't wanted to budge off of a 5% cap rate when mortgages are 7%. And so there's a negative cash flow that's coming in unless I'm paying cash. And so, unless I have outside money and I'm hoping for the appreciation, I'll take a 3%, 4% return because I think it's going to go up and get better. But for the average buyer that needs debt, it prices him out and he can't buy. And so it is becoming a little bit of strain. So I think where we're at is we're in a transition. People are still not confident about the future. A lot of noise with the government and everything else this past year, the tariffs. And so until the plane lands, but my gut is, and I'm feeling like we're past the pain, and there's sprouts that are starting to come out, and 26 will be better than 25, 27, but they don't boom. It starts slow and gradual and then builds to a frenzy after five, six, seven years. So it's gonna feel a little bit better, but still gonna be hard work that you got to go mono onto, face to face, eyeball to eyeball, find those people that need help and match that up to somebody that needs to buy. And that's the art of the deal. And that's why we get paid the big sums we get, because if it was easy, we wouldn't get the fees that we're talking about.

SPEAKER_04 33:18

Yeah. And to add to that, and you mentioned office space. So my office at Fair Child Partners and my team, we do a lot of office, a lot of industrial work, a lot of retail work. But I tell you on the office side, which has kind of been, you know, the one sector that, you know, was really hit hard, you know, after after 2020, it is making such a comeback in in Miami, South Florida, and across the country.

SPEAKER_01 33:42

Well, Tony Oyoa who just did a $50 million deal, I think, Ron. I don't want to say it wrong, but was it $25 million both sides? I think he got. He he I saw him the other day and he had a tie on, a coat and tie, and he was shaving. I said, Tony, you used to be the cool dude here. He goes, not anymore. This is corporate America coming to Miami. He says you better dress the part, and he says you better look the part. They don't want to see you in jeans and cutoffs. They want to see you professionally dressed. So I do think this New York professionalism, North Northeast, is kind of taking over where you're saying we're the influx in, we may need to shift our thinking of easygoing, casual play to a more corporate play because that's who's coming into the street.

SPEAKER_04 34:26

I always feel the pendulum always swings too far either way, right? In everything in life. And I think that we swung way too casual, and we definitely are going back to a little bit more formality, and it's probably a good thing.

SPEAKER_01 34:36

Yeah. Well, I think that's what they expect. You know, I mean, so in that old time, we we we uh we talked about billionaires. We actually have a Palm Beach Island office, and Nelson Pelts owns it. I mean, he comes in, billionaire, he he comes in every day, and our people see him, and he's eighty eight years old, and so I think that old financial groups are hard-hitting, direct, you know, take no prisoners. And so I think if you're playing in that game, you do need to attract it and and and play and look and feel like them.

SPEAKER_04 35:08

Excellent. Ruben, any forward-looking thoughts? Any questions you have?

SPEAKER_01 35:12

What I a question I was kind of since you've been seeing this transformation that you've been talking about here in Miami over the last couple decades, is there one or two particular some story or deal or building or something that you would say, hey it just is memorable to you that it's kind of say, hey, you know, this was what I found and for our and again I can probably tell you more I I sold the for my one of the great eye openings. I had the opportunity to sell 13 acres on the bay back when I was selling it. My dad says when you haven't done anything lately, you

Miami’s Post‑COVID Edge And Global Magnetism

SPEAKER_01 35:44

haven't done much. It was the Howard Hughes. Whatever you've done for the Howard Hughes property that was the on Bay Shore that actually was a Deering um estate owner, Daniel Deeringsen owned it, and it was like 13 buildings. We listed it for I learned early on, I had two corporate plays there. One was the Exxon building when I was managing Coral Gables. It was a hundred thousand square feet, and we thought it was worth it. So yeah, we thought it was twelve million dollars at the time, and there was a New Yorkers came down and they and they listed it for 19. And I called the guy up and I go, What were you thinking? He goes, You lowballed us. I said, You said you were gonna sell it in 90 days. And you know, this is when I was young and didn't know anything. And he goes, We two and a half years later, same company, Grubb and Ellis at the time, sold it for 12 million dollars. So, so I thought, wow, so the even the corporate guys don't they want a CYA. Yeah, they don't want to give it away. So when I went in on the on the Howard Hughes deal, 13 acres, I said it's worth six point six and a half million dollars, and we'll list it for nine nine because it's Howard Hughes. A year later we sold it for six and a half million, six point four, and it was bought by both Carolton, bought the back half, and a developer bought the front half. But that was a view, I mean 13 acres on the bay, you know, with a little uh dock and um kind of a like basin, a basin in it that you could bring boats into it. It was a beautiful piece. But what my answer to you is this it's always shocked me. We bought the old Miami Association Building, building down on 160th Street in US 1. It was on the west side of the road. If you know that market, my dad goes, those neighborhoods don't change. What are you buying that for? And and we didn't. We ran a branch out of there for a number of years, and then L Car Wash came in and bought it. And I thought my dad passed away, but it sold for five, six times what we paid for. So what I've learned, it almost doesn't matter in South Florida. All ships rise, and maybe some rise better. If you had picked Winwood, you know, two years before Winwood, you would you would have gotten the home run. That was probably the. Yeah, that was the lottery winner, the design district, because those were so out of sync, and then they got so much in favor. Those would be what I call the lottery winners. But typically, I've seen uh if uh the growth over the over the 30, 40 years, steady eddy. And then, but over time, that's what people don't want us here. It's a 10, 20 year investment. It's not a two, three year flip and play because then I'm just burning, churning money.

SPEAKER_00 38:15

Right.

SPEAKER_01 38:15

Stay in the game, don't sell. I've talked to a lot of business guys that said my business was okay, but I own the real estate. At the end of the day, the real estate is what they're living off of.

SPEAKER_04 38:26

And so along those lines, similar story back in the early 90s, working for Jack Lowell, who was a mentor and and and also sat in this same chair you're sitting, and we honored him some years ago too. Rest in peace. He we uh we listed a five-acre piece of property on Brickle Avenue, 550 Brickle Avenue. Wow, with a little probably 40,000 square foot building. We marketed that thing from 92 to 93. We couldn't find a buyer. We started at 3.5 million. I think we sold it for 2.7 a year later. You know, this the sellers at the time had a plan and needed to sell and so forth. Forward wind. Oh, so a couple years after that, that same group that bought it flipped it for 9 million just two years later because it was the beginning of the of the end of that recession, the 90s, early 90s. Then four years later, it sold for double 18 million. I think now 600 brick has is is a monster building there. And and you know, sometimes timing it does count.

SPEAKER_00 39:20

No, we we might time, not time me.

SPEAKER_01 39:23

Yes, well, this so this is this will scare you a little bit on 13th Street and Biscayne Boulevard. My dad and the previous president bought two and a half acres on that right next to the art, Miami, the Arts Center. Sat on that sucker for 15 years paying big taxes, and that if you knew that market a little bit in that time, it was nobody wanted to be there. And then all of a sudden the arts building was going in, everything else, and we sold it in like eighteen two thousand I mean nineteen ninety eight, right before the dot com boom, right before that really came on, and then five years later it was probably five times what it would have been. So I mean. I said that that's what I've learned is I a lot of people regret selling because at the end of the day it it does go up.

SPEAKER_04 40:06

But but as you said, you got to be able to hold on during the downtimes. And that's the key. And you have to invest knowing there may be a downtime.

SPEAKER_01 40:15

No, you you need to keep your capital. You can't over-legged. You need to have assets and reserves. You need to build up income off of the properties. And so we played conservative ball. I mean, we were, you know, we were bunners, you know, running the first fast, stealing the second, sliding to third, and that just base hitting along the way, then that gives you if we hadn't done that in that 08, we had commercial loans that were, you know, 20, 30 million dollars that would have come due, but I did swaps and 15-year payouts that couldn't

Land, Density, And The Long Island Analogy

SPEAKER_01 40:48

come due. If they had come due, chips off the table, wipe out, and it would have probably taken us down. You know what I mean? So so I do think, and we and I always did swaps. And if I look at the 40-year history, because my dad didn't want debt, so when I started buying, the first deal we bought was 10% interest. He says, You gotta pay it off, go fast. And so I always did 15 years. But if I look back, it would have been better not to do the swaps. Right. It would have been better to float them and kind of go through with it. But being conservative, you at least knew your number, you knew it was probably slept better at night at that moment in time.

SPEAKER_00 41:22

Today we've heard uh some really good stuff, Mike. I I there's a common theme I'm hearing from what you've been saying, you know. It's you have a long game. Yes, a very long view. From the beginning, when you said that, hey, you you saw that the the business of brokerage was changing, and you would told your father, hey, we gotta change because there's a long view.

SPEAKER_01 41:42

And he put his arm around me and said, You're gonna go broke if you're gonna change the commissions.

SPEAKER_00 41:45

Right. So you you said but you're looking you had the long view. You had the the nationals that came to try to buy you, and then you did something that you also mentioned that Miami does, was kind of what does every kind of compare? So you've always had a higher bar that you want to reach up to with the company. I still feel that way. Miami was you know, competing with Toledo, like you said, or some of these other towns, and now it's in the arena of competing with Paris and you know some of the other national and international cities. So there's the Longview, there's the high bar that you're always reaching for. And I think those are some of the contributing factors to your success and to the the leadership.

SPEAKER_01 42:19

And we're still doing that. We have a 2030 strategic plan with my daughter. We want to double our volume. We do 8 billion, we've got to go to 16 billion. How are we gonna do that? We've got a strategy of with our management team, um, mortgage and title, how do you capture more business? We got a whole commercial strategy, got a whole commercial website. We were doing about a half a billion dollars, and so we really want to double that to billion. Ron's moving over, but we'll have made that announcement by then to help us do that. So I do think, again, it's having the vision where my daughter's very good, but then having the strategy and then having the tactics and holding yourself accountable to those, and then getting the right people to be able to execute. And that's it's not an easy game. The chess keeps it's like playing chess.

SPEAKER_00 43:02

Yeah.

SPEAKER_01 43:02

I mean, you you'd better better to have a rook than a pawn, but it's hard to find the rooks.

SPEAKER_00 43:08

Yes, it is.

SPEAKER_04 43:09

What tidbit or what message would you send the young broker that's looking to get into the industry, or young individuals looking to get into the industry, whether it's commercial, residential, yeah, with your experience, what and you know, our audience is is a lot of brokers in real estate, even though we have a lot of other industries, attorneys and accountants.

SPEAKER_01 43:27

I think it's all the same. I think it's for attorneys, for accountants, for anybody. I think where we're uh little, I've got eleven, I've got 12, 13 grandkids. I just congratulations. So I answered. So um Christina just had one. I mean, my son had one. The um I I think it's what what is the shift between tech, the new generation? Uh my kids really were on the bubble of the internet, and now our grandkids are in the middle of it. I I there's no question that great leaders and great salespeople and great business people are people-oriented. And so you have to become an expert at personalities, understanding what, like I said, it was chess, what's their motivation, asking questions. You're a guide, a counselor for looking for people that need help. And both the CPA, the lawyer, they need business, and those that are good will get business, and those that aren't will wait for business. This isn't a retail where I sit back and hope people call me. This is a wholesale game where you got to go find your business. And the dilemma is we want to do it by texting. Nobody does a deal by texting. Everybody does a deal to understand. And if you miss the innuendos and you miss the face-to-face and you miss listening, then I so I think the social skills and the people skills are m way more valuable than the knowledge. I do think you can get knowledge. And so you say commercially, there's only 80,000, 90,000 commercial properties in South Florida. Data's there. Give me the owners, give me the sunbiz, give me the things, and go meet them and talk to them, ask them questions. You'll find motivation and you'll learn. And the dilemma is getting the knowledge and spending the street time to give the confidence to the consumer that you know what you're talking about because they're dogs. They smell the other dog. And if you're not a tough dog, they're gonna growl at you and blow you away. But if you're a tough

Affordability, Schools, And Regional Shifts

SPEAKER_01 45:30

dog because you know your your game, and the only way you know your game is on the street. And so my answer to you, if I was new, get on the street, talk to a lot of people, learn your trade, get the data. There's information grow out of your wazoo that you can get. And so it's not information you need, but you can get that, but it's the people that you need to find those that out of a hundred people next year, I promise you, four, five, or six are gonna need them real estate needs. The catch is you just don't know which four or five there are. Right. So I got to talk about it. You gotta cast the net. And we we for some reason want the phone to ring and we want it to, we want to be think it's like a McDonald's drive-thru. I want a commercial building. Okay, drive around. Here it is, you know. And it isn't that way, you know. I want a house. I mean, so so I think the and and commercial is both wholesale, meaning I gotta find it, and then I've got to find the buyer. Residential, I find the listing, I let the system find the buyer. So it again, it's a big puzzle. And and so my my answer would be database management and making the contacts. If you put those two together, get your list down, really know your product and know your people, and then it putting the puzzle together, you'll have all the business you want if you make those contacts.

SPEAKER_04 46:50

Wow, excellent. Amazing contact.

SPEAKER_00 46:52

What a way to wrap it up. That's a that's a that's a bow tie if I've ever heard one. There you go. That's beautiful, beautiful. Well, thank you very much, Mike Pappas with Kais Reality, and appreciate everything, all the knowledge you've and your time. Thank you sharing with Tony. Always thank you very much, and thank you for uh Ruben's the cool dude in the crowd.

SPEAKER_01 47:11

No, no, Tony's the go. So thank you, Ruben, thank you, Sonia, thank you, Ron, and the whole team. And and we're we're expecting, we're budgeting a 15% improvement. We think the market's gonna give us six, seven percent, and then we've got to match that with improving our efficiencies in our system. So we'll see. That's our goal, and that's what we've we're challenging our team to do, and we're very excited.

SPEAKER_00 47:34

16 2026, 16% bump, huh? Yeah, that's what we're looking for.

SPEAKER_01 47:38

15.

SPEAKER_00 47:39

1515.

SPEAKER_04 47:40

We're looking forward to seeing you again on January 14th. We're gonna spend again a similar setting and just you know educate our our our members and and the individuals that will be at the conference and and and we'll go from there. And thank you, thank you very much again, and congratulations on you.

SPEAKER_01 47:54

C C I Ms. They know the market. So we we want you to do well and everybody to do well. Excellent. Appreciate that.

SPEAKER_00 48:00

All right, well, thank you. Thank you.