Terranova’s blog on real estate, retail related market trends, upcoming events, and more!

Micro Suites

Thinking Small: Inside Real Estate’s Next Huge Movement

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June 15, 2018 — TERRANOVA TRENDS — BY ANDREA SPEEDY Ask typical consumers in the Western hemisphere to describe a “micro unit” in terms of real estate, and after they take a few moments to think, they might tell you about the tiny apartments they’ve either seen or heard about in Japan… but they’d only be partially correct. Today’s micro units now exits throughout the globe, are growing in popularity in the United States, and extend well beyond the residential sector to include retail, hospitality, office spaces, dining & entertainment, and more.

Generally defined as spaces ranging between 300 and 600 square feet, micro units are becoming increasingly popular due to the value proposition they offer to consumer audiences, and the strong potential return on investment they deliver to property owners. Even better, the cost-benefit equation on micro units plays out almost exactly the same no matter where or what the space will be used for.

Consider two scenarios that typically have very different real estate priorities: residential tenants and retail tenants. Traditional perspectives would dictate that the residential tenant wants as much square footage as he or she can possibly afford for a certain monthly price. Retail tenants, on the other hand, value location over size – knowing that a better small store or restaurant that is always full is better than the large space that always seems empty. Recently, however, these two audiences have started to converge.

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Industrial Revolution

Industrial Revolution – The E-Commerce Merger of Retail & Industrial

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June 6, 2018 — TERRANOVA TRENDS — BY ANDREA SPEEDY Over the past five years, industrial real estate has been turning in annual returns approximately 1.3% higher than the entire real estate industry average. Typically, the historical norm for industrial properties stood at 10% annual returns on an unleveraged basis… but recent performance is now closer to 12.8%. While this has definitely caught the eye of capital markets looking to diversify investment portfolios with real estate that has been delivering above office, retail, and apartments – the shift reveals an evolution taking place in the overall commercial real estate market.

Supply and Demand

Big changes are already underway in traditional retail development – from building more immersive store environments, to innovative mixed-use properties, to adaptive re-use and re-development of under performing spaces. On the other side of the spectrum, the industrial property inventory has been unable to keep up with ravenous demand from e-commerce uses, driving up the cost of industrial space. In South Florida in particular, this supply-demand scenario is heightened by a lack of available large parcels of land suitable for new industrial development. Since 2008, residential and mixed-use has driven much of the development landscape in Miami-Dade County, with commercial properties joining the development cycle a few years later.

Changing dynamics on the demand side of the equation are also shaping a new future for industrial real estate – not least of which is the ever-increasing business related to e-commerce fulfillment. As more and more businesses look to serve digital consumers with prompt (or even same-day) delivery of everything from apparel to electronics to groceries, industrial warehousing space has become a highly sought-after commodity.

A recent Terranova joint acquisition in Doral was selected for precisely this reason. “Our new industrial property in Doral has unbeatable proximity to the Palmetto Expressway (SR-826) as well as Miami International Airport,” says Stephen Bittel, Chairman for Terranova.

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Seeing Beyond the Boundaries the Rise of NoLi

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March 4, 2018 — TERRANOVA TRENDS — BY ANDREA SPEEDY When Miami Beach was first envisioned as a relatively simple beach escape in the 1920s, no one expected its meteoric rise to become one of the world’s most sought-after destinations for entertainment, travel, retail, restaurants and more. However, after bouncing back from hurricanes in the 1930s, to serving as military barracks during World War II, to the glamorous hotel era on Collins Avenue in the 1950s, Miami Beach developers have continuously succeeded in reinventing Miami Beach to garner a larger and larger share of the spotlight.

The revitalization of Lincoln Road along with the preservation effort of Deco-style hotels in South Beach started in the mid-1990s, which in turn brought a new wave of residential development to South Beach. And for the past two decades, development has been principally residential in nature. However, almost six years ago Terranova Corporation began investing in Miami Beach real estate, recognizing the need for strategic commercial development in Miami Beach.

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