Stephen Bittel's Terranova Corporation Sees the Continued Value of Urban Development in South Florida Amidst Coronavirus Pandemic
By Sean Bubb, Neighbor
Jul 23, 2020 1:10 pm ET
As the founder and chairman of one of the top commercial real estate firms in southern Florida with over 40 years experience, Stephen Bittel knows the industry. A native of Miami whose family has lived in the city for generations, Bittel has used this knowledge of his hometown in combination with a shrewd intuition for trends within the real estate market to build Terranova, a company that has served as the exclusive agent for more than $5 billion worth of commercial projects throughout Florida. Starting in the 1980's by building a large portfolio of properties in municipalities near Miami, Bittel's company heavily invested in suburban shopping centers during a time when young families in search of more space were moving further and further out of the city. However, in the early 2000's Bittel's sharp instinct told him that younger generations were beginning to see the benefits a more urban lifestyle could bring and began purchasing commercial properties in up-and-coming urban centers such as Miami Beach and Coral Gables.
As perceptive as Bittel is when it comes to southern Florida real estate, nobody could have predicted that 2020 would bring about a pandemic that would see the country -- and the world -- grind to a halt. With people maintaining their distance from each other and businesses struggling to operate during a time when every contact with someone outside of your home poses some form of risk, some are predicting this could mark the beginning of a mass exodus back to the suburbs. However, the thoughtfulness and care put into developing the urban streetscapes of the greater Miami area by companies like Terranova mean they are well positioned to continue to add value to those living near them.
Although Bittel entered college believing he would follow in his father and grandfather's footsteps and become a lawyer, he developed a keen interest in business while studying economics for his undergraduate degree. He went on to attend the University of Miami School of Law, but started Terranova in 1980 during his first year of law school after seeing an opportunity to get in the real estate market and seizing it. He managed to grow his company considerably from his home office while also completing his law degree and passing the bar exam, and after surviving the real estate market recession of the late 1980's the company continued its expansion into the municipalities of South Florida. earn More At their peak within the suburban market, Terranova had a property base of over 8 million square feet, owning and operating numerous office buildings, industrial parks, multi-family, and self-storage assets. In addition to this, they have worked with over 100 different open air shopping centers, making them a focus of their portfolio. By investing in shopping centers that had an anchoring large chain such as a drug store or supermarket, they were able to build strong relationships with companies like Publix, Walgreens, and Starbucks and hold multiple leases with the same tenant. The 1990's saw growing families purchasing suburban properties near these shopping centers, and for a time their symbiotic relationship saw sales for the tenants of Terranova's strip centers grow in tandem with the sprawl of residential property. However, as it reached the early 2000's, Bittel began to notice that his own younger employees were no longer purchasing new homes in locations like Kendall, an hour away from Miami proper. Instead, they were choosing to purchase and renovate smaller, older homes in locations closer to the city center like Coral Gables. Recognizing this subtle shift would only continue to grow as more time passed, Terranova began shifting their focus away from suburbia and instead to urban retail centers in areas that were part of a walkable downtown core.
The diversification of Terranova's portfolio saw them put a focus on two locations within the greater Miami area. In the mid-2000's Bittel and his company purchased their first buildings in an eight-property portfolio on Miracle Mile, a stretch of the main east-west road in Coral Gables' central business district. As one of the United States' first planned communities, everything about the city and Miracle Mile had been designed meticulously and with purpose, and it's easy accessibility and proximity to Miami proper made it a location that seemed to Bittel and his company primed for urban development. This speculation soon proved correct, as in 2016 the city embarked on a $21 million streetscape project, undergoing extensive changes such as widened sidewalks, new colorful pavement, and blocking off of some roads to vehicle traffic. The city also created a new valet system where a visitor can pick up a car from a station other than the one where it was dropped off, ensured the original trolley system was updated for an air of nostalgia, and even has free Wi-Fi provided by the city in the entire area. All of these updates were made with the intention to improve walkability, add space for outdoor dining, and generally improve the pedestrian experience within the area. The project was completed in 2018 with Terranova playing an active role in its development, and Bittel has said while they expected the beautification efforts to pay off they did not expect the results to be so instantaneous. Tourism, local revenue, residential components, and commerce all improved greatly, and in 2019 Bittel and his Terranova subsidiary Gables Miracle Mile LLC submitted a proposal for the Mile Hotel and Shops, a 120-key development that would feature seven stories of mixed-use space. Working closely with the city leaders on its development, the project would continue to aid in growing the city's economy through its proposed 15,000 square feet of ground floor retail and restaurant space, second floor of office space, hotel rooms on floors three through six, and a rooftop restaurant, bar, and pool.
The second urban location Bittel chose for development was Miami Beach's Lincoln Road. The road was closed to traffic and premiered as one of the nation's first pedestrian malls in the 1960's, and since then remains among the most popular destinations for visitors to the South Beach area. Getting in at the ground floor, Terranova initially purchased $52 million worth of property on the street at $850 per square foot in what was seen by some as an exorbitant price, but through their expert leasing efforts contributed greatly in raising the value of the properties. By 2014, Terranova made headlines when they made history as part of one of the largest property sales in the history of southern Florida, selling their property on the road for a staggering $342 million. Today, they continue to remain active in the properties after the sale and in November 2019 the street seemed to be following in the footsteps of Coral Gables with a $67 million rejuvenation project helmed by James Corner, the landscape architect responsible for New York's High Line.
Although plans are still underway to begin the rejuvenation project on Lincoln Road, the city of Miami Beach's BID has currently shifted its focus on a recovery plan designed to support their businesses and protect their visitors. Though some may be worried about how streets like Miracle Mile and Lincoln Road will fare in a post-pandemic world, thanks to the calculated urban planning done by Terranova and other developers, these locations are poised to not only survive, but thrive in the "new normal." Although the dip in tourism revenue may seem like a cause for concern for these highly popular locations, recent studies have shown that half of the country is expected to take a road trip within the next three months with Miami being number three on the top 17 most desirable destinations. In addition to this, their commitment to local restaurants and easy communal spaces mean that much of their yearly pedestrian traffic is local, and research has shown that while people desire to begin pursuing the same pastimes as they did prior to the pandemic, they are more likely to visit outdoor locations with cultural offerings rather than indoor destinations, making the lack of street traffic, widened sidewalks, and outdoor dining of Miracle Mile and Lincoln Road the ideal location to begin venturing out in a safe, open-air environment.
There are still many unknowns as to what will come within the next year, but without a doubt people will be seeking more connection, not less. By investing in spaces that combine living, working, and playing together, Terranova is catering to this need, and Bittel has said of their choices for development: "we take the philosophy that if we do what's good for the community, it's also good for our property."