Terranova: Navigating Down-Business Cycles

It is during times of economic decline that Terranova Corporation is able to develop and sell lower-quality land and generate steady cash flow from value-added activities like lease-up of residential properties. During the height of the real estate bubble, Stephen Bittel and his son, Chris Bittel, went from $2.5 million to $20 million in cash from real estate by selling parking spaces, retail stores, and undeveloped land His other son, Steven Bittel, bought $13 million in mortgage-backed securities in a concentrated amount.

These techniques are unique to Terranova. Stephen Bittel explained in an article that they don’t just go out and buy land, but that they are flexible in what they buy. When there are changes in the market, they can purchase land or equity.

This is called liquidity. Terranova Corporation, led by Stephen Bittel has significant equity positions in many of the troubled and assets it has purchased. If you’re well vast with commercial real estate investor and have not done a deep dive into distressed asset acquisitions and their importance to a company’s success, then you are missing out on some great opportunities.

Every company must have such an opportunity as part of their strategic plan. That has paid off and certainly was the case for Terranova as well, which has grown its portfolio of assets to $350 million in commercial real estate, a portfolio that is mostly located in Florida. The same precepts apply to Terranova’s position in the most recent real estate downturn, which began in 2008. Stephen Bittel stated that the way to navigate down-business cycles is to look at the “bottom of the top,” which is his term for the part of the cycle that is in deep distress. They see these distressed assets as investment opportunities.

Another strategy that Stephen Bittel likes to employ when things get tough is to get a close-up look at the area’s current leaders. He and his colleagues typically use a company structure called the “deal-tree” to find opportunities for companies that have a solid balance sheet but could use additional investment capital. This sort of approach allows them to avoid some of the potential pitfalls that will often derail other investors.

Stephen Bittel, born in Miami, Florida, is an entrepreneur who began investing in commercial real estate back in 1969 when he was working in advertising and graphic design. See this page for related information.

 

Additional information about Bittel can be found on https://www.e-architect.com/miami/stephen-bittels-terranova-coral-gables-miracle-mile