The coronavirus pandemic and subsequent lockdowns brought about unprecedented changes to practically every industry. While the economic cycle has shown that over time it is to be expected that there will be periods of growth followed by periods of recession, the abrupt and sweeping shutdowns across nearly every country and sector made an impact unlike any we’ve seen before. As we round the corner on two years since COVID-19 first came into our radar there are still many unknowns as to what shape the future will take. Will outdoor dining be a part of our future forever? Will air travel ever be as simple as it once was? Is remote work the new normal or will there be a hybrid model?
The future of commercial real estate will inevitably be affected by the answers to all of these questions, and for Stephen Bittel this has meant maintaining a delicate balancing act. As chairman of the South Florida commercial real estate company Terranova Corporation, Bittel has acknowledged that work must be done to simultaneously sure up operations and finances while still remaining flexible and open to take advantage of any opportunities that may arise. It may feel safe for many business owners during times of economic downturns to simply seek shelter and wait there to weather the storm, but Bittel has recognized throughout his four decades of work within commercial real estate that times of uncertainty can also be advantageous if one knows how to react.
Case in point, Bittel’s work refinancing loans for Terranova Corporation’s urban retail properties, taking advantage of the historically low interest rates that have been available. The Miami-based company recently secured a $55 million refinance of its Miracle Mile portfolio in downtown Coral Gables, consolidating and replacing loans from three lenders on 14 properties, including 220 Miracle Mile, 300 Miracle Mile and 253 Miracle Mile. Additionally, just one month earlier Terranova refinanced its Marshalls/Lincoln Eatery building in Miami Beach with a $23 million loan, with the financing for all properties being provided by City National Bank. Bittel has said that the money will be used to repatriate some of the company’s capital, and also accommodate tenant improvements, as well as return some of its originally invested capital. While the economic damage caused by the coronavirus pandemic certainly isn’t an ideal scenario for any business owner, by seeing the time as an opportunity rather than detriment Bittel has set himself up for success.
Who is Stephen Bittel?
As founder and chairman of Terranova Corporation, Stephen Bittel is leader of one of the top commercial real estate firms in Florida. A native of Miami, Bittel was born and raised in The Sunshine State before moving up the eastern coast to attend Bowdoin College in Brunswick, Maine. Trading palm trees and sandy beaches for fall foliage and snow, he soon adapted to the initial culture shock of transitioning from a public school education to a highly selective private liberal arts school, and was able to thrive in the academically rigorous environment. During his senior year of university he applied for and was awarded the prestigious Thomas J. Watson Fellowship, a grant that enabled him to pursue a year of independent study outside of America, and Bittel spent a year traveling abroad researching the motivations behind European investment in the United States.
During his time in Europe, Bittel met with a number of investment advisors and bankers throughout Europe and was struck by the private banking model that provided a one-stop personalized service to high-net-worth individuals. However, after completing his study in Europe and graduating magna cum laude with a degree in economics, Bittel returned to his hometown and enrolled at the University of Miami School to pursue a law degree. His father and grandfather were both lawyers, and Bittel had grown up believing that he would follow in their footsteps and practice law. However, after working for a time at a commercial real estate firm to support himself through school, Bittel realized he could replicate those European private bank personalized services for offshore investors focused on the United States. A highly driven individual with an unshakable work ethic, Bittel started Terranova Corporation from his home office while still attending law school, graduating and passing Florida’s bar exam as his business quickly scaled.
About Terranova Corporation
Bittel chose the name Terranova because it meant “new land” in Latin, a reference to the opportunities for investment that lay in the United States for foreign investors. Perhaps one of the reasons the company has managed to make it into its 41st year of business and thrive in times of uncertainty comes from the fact that Bittel founded the business in the midst of a recession, starting with a negative net worth and severe undercapitalization in 1980. However, his inherent motivation to work hard and succeed saw him build a thriving business during a time of economic distress, choosing to offer management services to pension funds, insurance companies and banks who had involuntarily become owners of commercial real estate when loans defaulted during the housing market crash.
By the 1990’s, Bittel’s business had moved well past his home office and was a thriving business with over a decade of commercial real estate experience under its belt. Keeping his finger on the pulse of other sectors that affected the viability of prospective investments, he correctly identified early on that suburban development was on the rise as young and growing families sought more square footage at cheaper prices. As the suburbs became more crowded, there became a greater demand for quicker access to pharmacies, grocery stores and popular chains, and Bittel grew the company’s portfolio significantly by purchasing shopping centers and strip malls in the municipalities of Miami-Dade County. Having a property base of over 8 million square feet at its peak, Bittel streamlined operations by developing relationships with “anchor” stores such as Walgreens, Publix and Starbucks. These popular retail tenants not only allowed for ease of business through combined leases, but also served to drive traffic to the other businesses surrounding them.
While this strategy served Bittel and Terranova Corporation well for the better part of a decade, by the early 2000’s public sentiment began to shift back toward the convenience and activities available in more urban locations. Young professionals and families were choosing to purchase and renovate the smaller, older homes available closer to the city center rather than buy a turnkey or new build further outside of the city, and Bittel certainly took notice. Terranova began re-diversifying its portfolio, purchasing properties that were located in high street areas near a walkable downtown core. Bittel’s prediction of the popularity of such areas was at first met with someskepticism, as the company’s purchase of property on Lincoln Road in Miami Beach sent tongues wagging for its $52 million price tag. Coming out to $850 per square foot, the purchase was seen as extremely overpriced, but just a few years later Terranova Corporation became part of one of the largest property sales in the history of South Florida, selling their property on the road for nearly seven times the capital invested.
In addition to Miami Beach, Terranova also has multiple properties on Coral Gables’ Miracle Mile, and post-pandemic has continued to invest in the location. Just last month, the company paid $7.7 million for the retail buildings at 232 and 330 Miracle Mile, currently leased to the Greek restaurant Kaia and Gabriella Arango Couture. They also paid $6 million for the corner building at 300 Miracle Mile which was previously occupied by California Pizza Kitchen. Bittel has also continued to pursue realizing other properties within Terranova’s portfolio, earlier this year selling a near 24-acre development site in Doral to the logistics real estate firm GLP Capital partners for $15 million above the price it was purchased for in 2018.
A self-proclaimed workaholic, Stephen Bittel’s tenacity and business acumen has seen him steer Terranova through many a storm in its 41 year history, and although the coronavirus has been unprecedented by many standards it ultimately serves as simply another way for Bittel to make the most out of his industry’s many twists and turns. Through refinancing, strategic acquisitions and gainful sales, Terranova Corporation has managed to make lemonade out of the lemons that have been the past two years, and although the future is uncertain for many industries those who are driven will certainly do the same.