AUTHORITY MAGAZINE – March 22, 2022 BY JASON HARTMAN
As part of my series about the ‘Five Things You Need To Know To Succeed In The Real Estate Industry’, I had the pleasure of interviewing Stephen Bittel, chairman and founder of Terranova Corp.
Stephen Bittel is the Founder and Chairman of Terranova Corporation, an opportunistic alternative investment firm with a core focus on U.S. real estate and an investment portfolio valued at nearly $1 billion. With a long-standing commitment of building better communities, the company is distinguished as a national leader making an indelible imprint on the commercial real estate industry.
Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the Real Estate industry?
I was born in Miami in our public hospital in 1956 and went to K-12 public schools, in which I ‘m still very much engaged. As a child, I grew up hearing my family and their successful professional friends over dinner at our house talking about business and real estate investments, so these concepts were ingrained in my mind from an early age. I’ve always viewed real estate as the ultimate adult game of monopoly, and for some reason, I’ve always had an uncanny knack for it.
Interestingly, while I loved real estate, I grew up thinking I would naturally follow the footsteps of my father and grandfather, who were both very successful lawyers. I applied to law school while traveling Europe under the Thomas J. Watson Fellowship grant, after graduating magna cum laude with an economics degree from Bowdoin College. Since it was always my plan to come back to Miami, I attended the University of Miami School of Law with a partial scholarship and supported myself in law school by working full time at a commercial real estate firm.
When that firm offered to take me from salaried pay to commission, I decided to quit because I thought I could make more money by establishing my own business. I still earned my law degree and passed the bar exam, although my true passion was always in the world of business and, particularly, commercial real estate.
I started Terranova in the fall of my second year of law school out of my house. I had a great few years and graduated with an office, seven employees and three properties that we syndicated under management. We had a great run until about 1986 when the real estate industry blew up with the combined effects of the Tax Reform Act of 1986 and The Financial Institutions Reform, Recovery, and Enforcement Act of 1989. We then roared into building what would become the largest third-party management leasing business in the southeast United States. I named the company after seeing the word “Terranova,” which is Latin for “new land,” in a section on foreign words in the back of the dictionary. Today, I find it incredible that I get to have fun playing this game of adult Monopoly every day and make a lot of money at it.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?
My entire career is so full of interesting and amusing stories that it’s hard to pick just one. So I’ll share something that illustrates an important characteristic that has been integral to our success , which can bring value to anyone making any strategic investment.
Years ago, when I purchased Terranova’s first set of properties on Lincoln Road in Miami Beach for $52 million at $850 per square foot, I was widely criticized for spending an amount many called “staggering.” It always amuses me that I later sold these and other properties for a more “staggering” number: $342 million. This deal, which at first was so widely criticized by the masses, solidified Terranova Corporation’s position as a leader which today owns and operates an investment portfolio worth almost $1 billion. So the lesson is: know when to follow your gut and ignore other people’s opinions. It takes vision and courage, but that’s how most great things are achieved.
Do you have a favorite “life lesson quote”? Can you share a story or example of how that was relevant to you in your life?
“The road to success is always full of unexpected twists and turns. Some of the most important lessons can be learned from the mistakes you made and the ones you didn’t make. Embrace everything as a lesson, informing you what to do next.”
The deals where I’ve made the most money and for which I’m best known are ones where people called me “crazy.” I’ve always been grateful that I chose to ignore the noise and listen to my gut.
Are you working on any exciting new projects now? How do you think that will help people?
In addition to all the charitable and nonprofit work we’ve always done, much of which we have kept behind the scenes and under the radar, we will continue to pursue local, national and international opportunities beyond real estate. Terranova today is investing in innovative companies in such dynamic industries as life sciences, technology, healthcare, petroleum and agriculture that will increase public access to new ideas and solutions that will make life better for people.
What do you think makes your company stand out? Can you share a story?
Beyond our success in business, Terranova is distinguished for its long-standing history of building better communities. We’ve always donated our time, talents and treasure to impactful projects toward a greater good. One key example is the Parkinson’s Foundation. Our President, Mindy McIlroy, has Parkinson’s and serves as a board member of the organization, and I’ve personally been a major donor. With our help, the nonprofit has been able to open multiple Centers of Excellence across the country developing new treatments and improving care. Mindy has led campaigns for Moving Day Miami, which is the National Parkinson’s Foundation’s annual fundraising walk, and has set fundraising records which remain unsurpassed.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I’ve always been naturally inquisitive and open to learning anything valuable from anyone, so it’s hard to narrow it down to one person. However, interestingly, I’ve learned most of my greatest life-changing lessons from those who weren’t necessarily trying to help me. One of the earliest examples was when I was at law school at the University of Miami, and the commercial real estate firm where I worked to support myself tried changing my pay from salaried to commission. Believing I could make more money on my own, I quit to start Terranova — and this has always served as a powerful reminder that it’s important to know who we are and believe in our ability to achieve our goals.
Ok. Thank you for all that. Let’s now jump to the main core of our interview. Can you share 3 things that most excite you about the Real Estate industry? If you can please share a story or example.
I’m excited by the continued growth of markets like South Florida, as evidenced by the fact that leasing of restaurant space at Terranova properties is at 100% and rates are higher than pre-pandemic levels.
Also excited to see that restaurant tenants are figuring out how to reinvent their businesses with new online ordering, takeout and delivery and outdoor dining options — and for this reason the restaurant industry will continue to come back stronger. Markets like Coral Gables, for example, are continuing to grow in popularity for meals any time of day.
Most importantly, we can expect to see continued opportunities for strategic investment in real estate, including industrial and multifamily, in key markets across the country.
Can you share 3 things that most concern you about the industry? If you had the ability to implement 3 ways to reform or improve the industry, what would you suggest? Please share stories or examples if possible.
The return to office is always a concern. Every company will have its own policy based on its unique situation, and I am not sure we will see folks returning in full force for a while. We’ll just have to wait it out.
Staffing shortfalls in construction will continue to cause project delays for the foreseeable future. Considering that we’ve kept our borders closed for five years, it shouldn’t come as a surprise to anyone that many of these positions are going unfulfilled.
Traditional retail had been suffering long before the pandemic and is probably the commercial real estate sector that will have the trickiest recovery. Retailers, especially those like Kmart with older models that haven’t updated their offerings, will continue to hurt. Modernization is key, and Walmart and Target are great examples of the benefits of creating an online presence and changing store offerings.
What advice would you give to other real estate leaders to help their teams to thrive and to create a really fantastic work culture?
Involve your company in corporate social responsibility initiatives that support meaningful causes and enhance the community you call home. Engage your team members in these initiatives — there’s nothing like bringing people together to work toward a greater good. This has always been part of Terranova’s DNA.
Ok, here is the main question of our interview. You are a “Real Estate Insider”. If you had to advise someone about 5 non intuitive things one should know to succeed in the Real Estate industry, what would you say? Can you please give a story or an example for each?
- Know your passions and follow them because that’s where you’ll find your greatest destiny. While it wasn’t easy at the time to not follow the footsteps of my larger-than-life father and grandfather, my decision to not become a lawyer after graduating law school has made all the difference.
- Don’t just take what you’re offered because it’s easy — think outside the box and follow your vision. My decision to turn down a high-paying position at a commercial real estate firm in order to start my own company enabled me to achieve the success I have today. I always knew I could make more money on my own, and indeed, I was correct.
- Follow your gut. I bought Terranova’s first set of properties on Miami Beach’s iconic, world-famous Lincoln Road for $52 million at $850 per square foot — a price many criticized as “staggering.” Interestingly, I later sold these and other properties together for a more “staggering” number: $342 million. This deal solidified Terranova Corporation’s position as a leader which today owns and operates nearly $1 billion in assets.
- Cultivate leaders within your company. Our President, Mindy McIlroy, started out as my assistant in 1997. Our culture of empowerment and mentoring positioned her two predecessors — former Terranova presidents Trish Blasi and Beth Azor, together with me — to support Mindy. With our mentoring and guidance, she grew into this leadership position where she oversees all day-to-day operations for Terranova’s diverse retail portfolio and has personally completed over $1 billion in retail leasing transactions.
- Outwork your competition. Don’t be afraid to make mistakes, but be bullish and put in the time to know everything possible about every detail so that you can tell a cohesive story. Manage viciously. Retire the biggest debt first. Take advantage of long-term plays. Pick the right person as a source and that you look up to, get to the office before them, stay later and be always available when they want you to go look at a deal on a Saturday or Sunday. There is no easy way out, but to outwork your competition.
Because of your position, you are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)
I would like to see clean meat really take off and clean meat labs replacing farms and slaughterhouses. We are continuing to see demand for vegan meat increasing, a trend I fully expect will continue as people get smarter and wiser about the wellbeing of our population and our planet. Investment opportunities in this arena are very exciting.