Surf, Sun and Shopping: CRE Executive Stephen Bittel on the Strength of the Pedestrian Mall in South Florida

With gorgeous beaches of fine white sand and turquoise blue waters, dotted with palm trees and temperatures that rarely dip below 70 degrees, it is obvious what draws people to live and play in South Florida. Nobody can deny the siren song of a city that sees sunny days for over two-thirds of the year, but the weather does more than just create perfect beach days. It has also helped Lincoln Road flourish as one of the few remaining original pedestrian malls in the United States. 

According to Stephen Bittel, an investor with over three decades of experience in commercial real estate, the most-visited destination in Florida is the beach. Calling it the “starting magic,” he explained that with Lincoln Road’s location only a few blocks from the ocean it is ideally located as a spot for retail and dining after a day at the beach. Bittel’s company Terranova Corporation has owned property on the street since 2011 when it closed on a landmark three-building deal to the tune of $52 million. By 2014 his firm had purchased six properties in total on Lincoln Road at the cost of $191 million, and later completed one of the largest deals in South Florida history when it sold them for $342 million, and again reinvesting. 

Terranova’s investment in Lincoln Road properties was part of a larger pivot on the part of Stephen Bittel, whose previous strategy for the business involved a heavy focus on the suburban properties that had spurred the development of pedestrian malls in the first place. In post-World War II America people began migrating to the suburbs at record rates, and by the 1960s and 1970s enclosed shopping centers began appearing en masse in these areas, further driving customers away from the downtown shopping malls that had proliferated in earlier years. 

Seeking to draw people back to the rapidly declining areas, urban planners began closing streets to through traffic in order to transform the retail areas into pedestrian malls. Incidentally, the large indoor retail buildings known as “shopping malls” only began calling themselves as such after the pedestrian malls began to become more prevalent. Unfortunately, most of these pedestrian malls were not located in areas as advantageous as that of Lincoln Road and the majority of those that cropped up in the mid-century have long-since ceased to exist. 

Lincoln Road runs east-west directly through the center of Miami Beach, almost connecting the Atlantic Ocean on the west side of the city to Biscayne Bay on the east side. Originally nothing more than a watery wetland overpopulated by trees, Lincoln Road was one of the inaugural streets built by entrepreneur Carl Fisher who had the trees cleared and sand spread over the area to create an artificial island on which Miami Beach still sits today. 

Located at the heart of the city, as Miami Beach grew Lincoln Road began to host some of the biggest retail darlings of the era like department stores Saks Fifth Avenue and Bonwit Teller as well as car dealerships such as Cadillac and Packard. In its heyday, the street was considered a premium retail destination comparable to Rodeo Drive on the west coast and Fifth Avenue to the north. 

In the late 1950s the city commissioned popular architect Morris Lapidus to redesign Lincoln Road in the neo-baroque Miami Modern (MiMo) style he had popularized in the area. Utilizing gardens, fountains and shelters in his designs which also introduced an amphitheater to the street, the new Lincoln Road Mall was opened to the public on November 28th, 1960 just in time for holiday shoppers. Billing itself as “the most magnificent shopping plaza in all the Americas,” it became one of the first pedestrian malls in the country as cars officially lost access to the 3,000ft linear strip.

Unfortunately, the beauty and history of Lincoln Road was no match for the shifting consumer sentiments of the time. Having already been dealt one blow when hoteliers began to include space for luxury retailers off of their lobbies, the opening of the Bal Harbour Shops, an open air shopping mall in the northern tip of Miami Beach, in 1965 further pulled customers away from the already declining city center. 

According to Bittel, who founded Terranova Corporation in 1980, for decades the trajectory of residential real estate was solidly moving in the direction of the suburbs, and where residential trends go commercial follows. For him, this meant focusing on the ever-present demand for easier access to grocery stores, pharmacies, and popular chains and at its greatest the real estate investment firm had nearly 10 million square feet of property including office buildings, industrial parks, multi-family, self-storage assets and over 100 open air shopping centers. 

While Bittel’s business was thriving in the 1980’s, Lincoln Road was rapidly losing its luster as popular retailers left the street for greener pastures. Cities across the United States had been left with derelict downtown areas and Miami Beach was no different, especially considering its culture centered heavily on car travel. And yet, in spite of the junky T-shirt shops that Bittel said lined the streets of Lincoln Road during that period, the pedestrian mall did not go in the direction of many others and revert back to a normal street. 

In the early 2000s, Bittel began to notice that his younger employees were no longer seeking to purchase homes in the suburbs. Instead, they were purchasing and renovating older homes located much closer to the downtown areas of the greater Miami area such as Coral Gables and Miami Beach. Indeed, real estate like most things is cyclical, and the sentiment of this new generation preferred the walkability and plethora of activities available in a concentrated area like a downtown over the larger homes but spread out nature of the suburbs. As a result Bittel shifted Terranova’s investment strategy to focus on urban retail areas such as Lincoln Road, and today remains a major property owner on the street. 

With tenants like Apple, Nike, Zara and Nespresso, the Lincoln Road of today has finally met the potential envisioned for it back in the 1960s when it first became a pedestrian mall. With a unique mix of anchor tenants of popular retail chains like the ones previously listed as well as more boutique and local shops to give tourists and residents alike a taste of Miami Beach culture, the street has become a strong representation of the city itself. 

In recent years, high asking rents and the closing of the Miami Beach Convention Center for renovations contributed to significant vacancies for Lincoln Road, but Bittel said that retail leasing is currently up on the stretch with occupancy at 90%. While the coronavirus pandemic was tough on retailers and their landlords across the country, the proximity to the beach and plethora of outdoor activities available has helped Lincoln Road remain a vibrant cultural center for the city. The pedestrian mall may have originated as a last-ditch effort to draw people back to city centers, but today Lincoln Road has proven that in the right location with the right property owners, the idea of an outdoor intersection of retail, food, and entertainment is certainly a solid one to say the least.