Current media coverage and upcoming developments hand-picked from the industry.

The grand reopening: As restrictions lift, CRE markets race toward recovery

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THE REAL DEAL — JUNE 14, 2021 BY SASHA JONES, LIDIA DINKOVA, AND ISABELLA FARR It wasn’t the pan-roasted halibut that drew a small crowd to Blu Mar on a recent Thursday afternoon.

One after another, guests on the splashy Southampton seafood spot’s outdoor patio removed the face coverings they had been wearing for the better part of a year and tossed them into a fire pit, which was then doused with fuel and set ablaze to the tune of “Disco Inferno” by the Trammps.

The gathering — convened just days after the CDC issued new guidelines that said vaccinated individuals could go maskless — wasn’t a protest so much as a celebration.

“The message was clear: Everyone must get vaccinated,” said Zach Erdem, owner of Blu Mar, which briefly had its liquor license pulled last summer over alleged violations of the state’s mask mandate, among other things.

With more than 138 million Americans fully vaccinated as of early June, Covid restrictions are quickly being lifted across the country.

In New York, indoor and outdoor capacity limits for most businesses, along with mask mandates for vaccinated people, were lifted May 19. California businesses will be free from capacity restraints on June 15. And though much of Florida had been open for business for months, Gov. Ron DeSantis suspended all remaining restrictions with an executive order on May 3, two weeks before the CDC’s updated guidance.

While these orders afford business operators significant leeway over just how stringent or lax they want to be — in some cases, a level of ambiguity that has risen to confusion — retailers, hoteliers, restaurateurs and office landlords are broadly optimistic about a comeback. Still, major obstacles remain, including a dire shortage of service workers, a sobering outlook for tourism and an unpredictable office market.

Mavis Benson said she saw an immediate influx of visitors to her Avalon Gallery in Delray Beach, Florida, after the CDC’s change in guidelines.

“It was almost like someone flipped a switch,” she said.

Classic Hollywood eatery Musso and Frank was shut for more than a year during the pandemic. It reopened for dinner on May 6, when Los Angeles County allowed restaurants to expand indoor capacity to 50 percent.

.Now it’s preparing to go to full capacity on June 15, and it won’t be requiring masks or asking patrons for proof that they’ve been vaccinated.

To mask or not to mask?

Equinox’s mask requirements are emblematic of the shifting circumstances from state to state. In California, masks are required at all times at the luxury fitness chain, while in New York, those who are vaccinated can go maskless. In Florida, anyone can opt to work out without a mask.

It’s one of the many retailers across the country deciding how to best react to the reopening. The verdicts that businesses come to can be consequential, according to Rachel Kolocotronis of the hospitality consulting firm Elliot Group.

It’s one of the many retailers across the country deciding how to best react to the reopening. The verdicts that businesses come to can be consequential, according to Rachel Kolocotronis of the hospitality consulting firm Elliot Group.

“If this restaurant decides that they want to be a little bit more strict with their mask guidelines, they run the risk of being mistreated by the guests,” Kolocotronis said. “If they want to be more lax with their guidelines, they run the risk of guests not feeling comfortable enough to dine there.”

Three South Florida businesses The Real Deal spoke with said employees are required to wear a mask, but not patrons. Even so, most customers are opting to keep masks on.

“I think wearing masks probably is going to be part of our society for a long time in our future,” said Stephen Bittel, chair of Terranova, which owns retail and restaurant property along Miami Beach’s Lincoln Road and Coral Gables’ Miracle Mile. “People are going to do what they need to do to feel comfortable re-engaging in the communities.”

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The Worst Case Scenario: Why That’s Where Your Power Lies

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THRIVE GLOBAL — JUNE 3, 2021 BY STEPHEN BITTEL As the Chairman and founder of one of the top commercial real estate firms in Southern Florida, I have plenty of experience thinking, sometimes agonizing, over the worst case scenario. I care about the success of the company and its employees, so how could I not inevitably worry about losing them? Downside risk is always on my mind and an often forgotten part of every investment analysis. However, what I’ve come to realize since founding Terranova Corporation in 1980, is that fear can be a gift or a curse, depending on its framing. When framed as the enemy, fear can easily take the driver’s seat without us even knowing, leaving us clinging to whatever security we can find. In an industry that changes as much as real estate, this isn’t an option. Had I taken this approach, I would still be playing a losing game trying to make the highly sought after 80s unanchored strip mall aesthetic work. And, I’d likely not be where I am today.

Instead, I choose to make fear my ally. Like most entrepreneurs, my fears center around the business failing in some way and as a result, letting down all the people that helped me along the way. By acknowledging my fears around the worst case scenario, I’m able to lead from a less fear-driven and more empowering place. While some leaders might respond to admissions of fear with a well-intentioned reminder to think positively, this response isn’t always the most efficient, or beneficial. Positive thinking runs the risk of sacrificing reality at the cost of remaining positive. To make matters more complicated, dwelling on the worst case scenario, instead of simply observing it, can send most of us tailspinning into nosedive of negative thinking. There is a difference between repression and strategic awareness, and that difference is where an entrepreneur’s power lies. But, how do we strike the balance between catastrophizing and repressing? A few important factors and strategies come into play here. Since a lot of us in corporate business have a tendency to use terminology that leaves room for interpretation, it’s important to clarify the semantics of power. With clarity, comes wisdom. And it’s from a place of wisdom that the most influential leaders are able to make a difference in the world.

How do we define power?

With leadership, comes power, but how a leader defines that power makes all the difference in how effective they will be in using it. Owing to the culturally propelled misconceptions around power, many of us think of dominance, force and manipulation when considering what qualities powerful leaders have. Yet, I’ve found that it’s often the opposite qualities that have made me feel most powerful in my role. Upon digging into the reasoning behind this, I discovered that what I noticed is a phenomenon called the power paradox. Coined by UC Berkeley psychologist Dacher Keltner, the power paradox puts into words the contradiction I was facing: the skills most important to obtaining power and leading effectively are the very skills that deteriorate once we have power. Keltner’s twenty years of research findings debunk the longstanding paradigms around what power is and isn’t. Contrary to the notion that power requires force, the research suggests that empathy and social intelligence are far more crucial to acquiring power.

So, how do we define a term that has become as ambiguous as words like “love” and “happiness”? History proves itself incredibly valuable in solving this particular puzzle. On April 3rd, 1968 Dr. Martin Luther King Jr. gave his last speech “I Have Been to the Mountaintop” to striking sanitation workers in Memphis and in it, includes what leadership researcher Brené Brown considers the most accurate and important definition of power: “the ability to achieve purpose and effect change.” Brown goes on to echo the dichotomies outlined in the power paradox, saying “what makes power dangerous is how it’s used. Power over [another person] is driven by fear. Daring and transformative leaders share power with, empower people to, and inspire people to develop power within.” 

The unsettling truth is that our human nature makes each of us susceptible to the ego-driven blindspots that come with the stress of having influence. Disregarding this fundamental truth is one of the risks I am unwilling to take as a leader. I’ve found that the most reliable antidote to the poisonous side of the power paradox is awareness and attention. I maintain a strict ethical code and mission statement to keep myself, my business and my employees accountable. By vowing that principles before profit would be the backbone of Terranova’s inception, I was able to remain intentional throughout the twists and turns of the beginning years. My hope is that by creating a culture of transparency and trust, my employees feel comfortable voicing, instead of singularly harboring, the worst case scenarios that nag at their own mind.

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As Miamians go back to work, new ‘digital nomads’ are changing the city’s economy

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MIAMI HERALD — MAY 23, 2021 BY ROB WILE and REBECCA SAN JUAN If remote working helped usher in Miami’s current wave of migrants, what happens now that it’s safe to return to work?

After a year away from the office, companies whose business can be conducted with just a phone and computer are working out just how to balance cost, lifestyle and corporate culture variables in the post-pandemic era.

The shakeout could have implications for Miami’s entire economy.

“It’s the million dollar question,” said Philippe Houdard, co-founder and CEO of Pipeline co-working spaces. While much of the U.S. economy was able to successfully pivot away from the office, he said, “it’s also been demonstrated that there are real limitations to just working from home.”

A growing chorus of firms say they are pivoting to a mixed model that allows for personal flexibility among staffers that still lets employers maintain a baseline corporate culture in a physical office environment.

It’s a strategy that could last — especially as Miami also sees an influx of “digital nomads” now calling the city home but ditching the traditional office model.

“The workplace is moving into a hybrid environment,” said Alan Kleber, executive managing director for commercial real estate firm JLL Miami. “Organizations are attempting to create strategies and policies of how work will get done, and that is going to impact [office] buildings.”

As a result of the shift, local office vacancies have, for now, tipped upward. In the first quarter of 2021, the Miami office market had a total vacancy of 19%, up from 18% in the fourth quarter of 2020, according to the most recent JLL office market reports.

Meanwhile, in this transitional post-pandemic moment, some firms are looking beyond the central business district, with virtually every sub-market in Miami-Dade seeing increased interest.

It all makes for a changing local office landscape that is poised to thrive.

‘DISTRIBUTED’ WORKFORCE

Alex Taub is emblematic of the shift. The founder and CEO of Upstream, a digital professional networking platform that on Wednesday announced it had raised $3.25 million from investors, Taub moved with his family from New York City to Miami in the throes of the pandemic.

He has continued to grow the company remotely, hiring workers both locally and back in New York. But for now, he has declined to purchase office space here. Taub said Upstream’s nine employees — only three of whom are in Miami — continue to work efficiently from home.

“We obviously like sitting down and jamming in person, but we are not committed to having a centralized office yet,” Taub said. As the rest of the world reopens, he may reconsider — but at the moment, “we don’t want to get locked into a lease,” he said.

As founder and chairman of real estate group Terranova Corporation, Stephen Bittel has a bird’s-eye view. The pandemic, he said, prompted many C-suite executives to move to South Florida. Whereas in the past, that may have signaled retirement or a second home, Bittel now sees permanent moves that will likely entail jobs moving, too.

“I think the next step is office space,” Bittel said, “and eventually they would move more and more team members to join them. That’s going to drive a population increase that will continue for the coming years.”

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