Thematic Capital Group Grows Its Investment Portfolio

By Ken Datzman

The more than $1 trillion commercial real estate sector offers wealth–building opportunities for ambitious people. And the dynamic industry, steeped in tradition, is seeing a youth movement. A new generation of investors and dealmakers is on the rise.

A growing number of young adults are charting a path toward building a commercial real estate investment portfolio. And Florida is an attractive state in which to do that.

Florida has a growing economy, is one of the best states for business, is tax–friendly, has a low unemployment rate, and continues to see population growth.

Part of commercial real estate’s allure is that it spans many diverse segments, including land, office, retail, industrial, hospitality, investment, and development.

“Dealmaking is exciting. Early on in my career, I always knew I wanted to be on the business side of things,” said Bernard “Bernie” Clevens, an MBA graduate of Emory University’s Goizueta Business School.

He has years of experience in commercial real estate having worked for some of the largest players in that sector, mainly in Colorado.

Clevens started his career in Denver working in real–estate development for the middle–market private equity firm Northstar Commercial Partners.

He led the financial modeling, entitlement process, and project execution for a build–to–suit Harley–Davidson sales facility, build–to–suit medical office facility, and an industrial speculative development. Clevens also supported capital sourcing efforts for two new funds. He started as an analyst with the firm and rose to associate.

Over the years, Clevens has built a network of contacts which has served him well.

In December 2022, Clevens, who grew up in Brevard County, took a bold step into entrepreneurship after seven years in the commercial real estate industry working for employers.

He established his own enterprise, Thematic Capital Group, of which he is the founder and owner. Clevens created a holding company for his investments. His boutique commercial real estate firm has two divisions — consulting and investment management.

“We are 100 percent focused on real estate,” said Clevens, whose company is based in Melbourne with an office in Atlanta.

“On the consulting side, we provide real–estate services to entrepreneurs and small businesses.” The services include financial modeling, capital raising, leasing, and pitch–deck presentations created to raise venture capital for businesses. “On the investment management side, we focus on industrial real estate, buying or developing warehouses,” he said. Nearly all primary and secondary industrial markets have seen rent growth over the last few years.

To date, his company has purchased $22 million of real estate in Central Florida. The firm is under contract for a $3 million transaction in Orlando. “And we are looking at a couple of other deals. Our investment horizon is primarily across the Southeast — North Carolina, South Carolina, Georgia, and Florida. Currently, most of our opportunities have been in Central Florida, given the relationships and Please see Thematic Capital Group, page 23 the network we have developed.”

Clevens said many of Thematic Capital Group’s acquisitions are “tenant–led. We find the space that fits the needs of our tenants and then acquire the building and become their landlord.”

He said Thematic Capital Group’s five–year goal is to acquire $100 million in real estate.

“To me, the most difficult part is finding the deals,” said Clevens. “In my experience, first as an employee and now out on my own, it’s an efficient equity market in terms of financing projects. In other words, if there is a good deal, it will get funded. In order to close $100 million in deals, we would probably need to look at $2 billion in real estate. We analyze the deals, review them, and do our due diligence. Generally, it turns out that only 5 percent, if not less, are worth pursuing for investments.”

As his firm gears up for growth, Clevens has recruited Benji Howard to join Thematic Capital Group as a real estate investment associate. Howard previously worked as a multifamily property broker in Tampa.

“I decided this would be the best step in my career at this time,” said Howard. “I think my skill–sets match up well with the firm. Having worked on the brokerage side of the business, as opposed to the capital side, I bring a little different perspective. I have done a lot of underwriting and back–end work, the functions that make a firm successful in commercial real estate.”

Howard added, “Bernie and I work well together. We are both ‘young and hungry’ for success. We are both working hard to raise the visibility of this company. We see opportunity in many different markets, which is positive on our end. We are in an expansion mode.”

He said Melbourne “is a great community. It’s definitely a good change of pace from Tampa. The traffic in Tampa was getting a little unbearable. We like Brevard County.”

Originally from Naples, Howard earned his bachelor’s degree in finance from Miami University in Oxford, Ohio. He had an internship with Matthews Real Estate Investment Services, a commercial real estate agency, in Cleveland, Ohio. He was a real estate associate working mainly in the brokerage operations of that firm.

Howard also worked for a drone startup in Miami, Florida. “I have always loved the startup facet of a business,” he said. Howard was a financial analyst for the venture.

He was 15 years old when he started a business in Naples and ran it for several years before going off to college. It was a bracelet company.

“I must have gone to 50 businesses in Naples trying to sell my bracelets,” said Howard. “I was a young kid dressed in a suit and tie making my pitch. It was a great learning experience in the world of business. It was like Mark Cuban selling trash bags to his neighbors.”

Howard continued, “I started the bracelet company as a 501(c)(3) and then switched it to an S corporation. We donated a portion of the profits to charity. I always tell people that my biggest accomplishment with my bracket company was I broke even.”

When he was 12 years old, Cuban wanted new sneakers. His father told him to save up. So, he bought $3 boxes of trash bags from a friend and sold them to neighbors for $6, Cuban told “GQ” magazine in 2022. In 1995, Cuban co–founded video portal Broadcast.com. In 1999, it was acquired by Yahoo! for $5.7 billion.

The Space Coast is a market in which Thematic Capital Group is looking to grow its investment portfolio, said Clevens. “Brevard is an excellent real estate market,” he said. “There is much growth in Brevard. We want to be part of the growth in this county. There has been solid employment growth, and you cannot mention Brevard without mentioning all the activity that is going on at the space center.”

Clevens added that his firm has purchased two properties in Brevard in the last six months.

“Industrial real estate is our focus. Our minimum investment size is $5 million. We have made purchases less than that, but because of the sheer time and energy it takes to close a transaction, and the upside for us, we have set a higher minimum. We want to spend our time where there is a little bit of scale for the company,” said Clevens.

He added that commercial deals can be complex and time–consuming. It may take six months to a year for the parties to settle on a sales price, secure funding, sign the paperwork, close escrow, and transfer ownership.

Leasing transactions generally take less time, said Clevens, whose experience includes having worked for Prologis Inc. in Denver.

Prologis is touted as the largest owner of warehouses in the world, totaling more than 1 billion square feet. The company operates in high–growth markets.

Clevens worked for Prologis for five years. He was involved in real estate transactions and gained in–depth experience at that company.

“I believed I had learned enough in the real estate industry that I could do this on my own. But first I wanted to round out my education and went on to Emory University. While I was there, I launched the consulting part of my business.”

He was awarded a full scholarship to attend Emory University’s Goizueta Business School. Roberto Goizueta is a former chair and chief executive officer of the Coca–Cola Co., headquartered in Atlanta.

“I did not have a great GPA coming out of college. I was surprised to have been given a full ride at Emory University. I think they were more impressed with my work experience than my academic grade–point average.”

He completed his MBA degree from Emory University in 2022. During his time there, Clevens and a fellow MBA student started the “Emory Real Estate Conference,” which brought real–estate professionals together in Atlanta.

The conference, hosted at the Whitley Hotel in Buckhead, was a big success. It sold out, with more than 500 people attending. The speakers featured were influential leaders in the Atlanta real–estate community, as well as capital market experts from New York. The keynote speaker was billionaire businessman Sam Zell, noted for turning around troubled companies and assets.

“The Emory Real Estate Conference gave me access and opportunity to meet a lot of the people who ran institutional funds,” said Clevens.

“It was through the Emory University relationships that people have backed our initial investment deals. Currently, we are backed by two family investment businesses that have offices in New York. We are expanding our network to include private equity groups in Denver.”

Clevens has a bachelor’s degree in political science from Bowdoin College, a small private liberal arts institution in Brunswick, Maine. “For a Florida boy, it was extremely cold there. But it was a great experience and I enjoyed it.”

While an undergraduate, he did internships in finance and real estate. One of his internships was with “Maine Angels,” an angel investment company in Portland, Maine. They invested in startups.

Clevens also had an internship with a real–estate developer in Maine. And he had a wealth management internship at a UBS office in Brevard.

He topped all that off by participating in the Tuck Bridge Business Program at Dartmouth College.

The three–week intensive certificate program provides enrollees with essential business skills by combining classroom experience and hands–on training. The curriculum is taught by faculty from the Tuck School of Business at Dartmouth.

“Over the years, I had a series of different internships and collegiate studies that led me to real estate,” said Clevens, whose father has been in business in Brevard for 25 years.

Dr. Ross Clevens, a Harvard Medical School graduate and facial plastic surgeon, founded Melbourne–based Clevens Face and Body Specialists and is its medical director.

According to a new report by Moody’s, the commercial real estate market “remained in a holding pattern in the second quarter of 2024,” as the industry awaits interest rate cuts. The macro–economy is in a “relatively heathy state,” a benefit for commercial real estate. But the professionals within the industry have shifted expectations of an optimistic three rate cuts to a more likely one or two in 2024.

“Regardless of the presidential election, I believe the economy, in terms of the commercial sector, will be on better ground in 2025,” said Clevens.

“I’m not an economist — and people can take my thought with the finest grain of sand they can possibly find on the beach — but I assume there will be one rate cut coming in 2024. My hope is the Federal Reserve cuts slowly and keeps a steady pace. What’s best for my company is that interest go to zero and we are buying real estate like crazy. What’s best for the economy, though, is a steady hand by the Federal Reserve.”

Interest rate cuts can’t come soon enough for the office sector, which in the second quarter of 2024 saw its vacancy rate increase to an all–time high of 20 percent in the nearly 50 years of data tracked by Moody’s, a bond credit rating business.

Brevard is not a large office tower market and industry experts remain optimistic about occupancy in 2025. The record number of people moving to Florida and new business formation have caused the commercial real estate market to grow tremendously.

In fact, Florida destinations dominated the U.S. growth cities list in 2023, with the Palm Bay–Melbourne market netting the largest number of movers in the U–Haul survey.

The “U–Haul Growth Index” found seven Florida markets among the top 25 growth cities last year. It marked the seventh year in a row the Sunshine State had had the most cities represented. Florida had four markets among the top 25 in 2022, and 10 in 2021.

U–Haul calculates growth markets by each city’s net gain (or loss) of one–way equipment rental from customer transactions in a calendar year. The U–Haul Growth Index is compiled from more than 2.5 million one–way U–Haul truck, trailer, and U–Box moving container transactions.

As a result of people continuing to move to Florida, the commercial real estate market presents opportunities for growth, influenced by the state’s robust economy, population growth, and strategic position as a gateway for international trade.

Currently, the shining star of the commercial real estate industry has been the industrial sector, which has seen strong demand over the last three or more years. For example, the growth of e–commerce has increased the need for warehouse and distribution centers.

A recent CBRE Research study found that for each incremental $1 billion in growth in e–commerce sales, there needs to be an additional 1.2 million square feet of warehouse space to support the growth.

“There seems to be very little vacancy in the industrial sector,” said Clevens. “We looked at a couple of developments early in the year, but because of construction pricing, the cost of materials, and financing, the projects didn’t make sense from an investment standpoint. But this market could use more industrial facilities.”

As companies make plans and prepare budgets for 2025, Clevens sees Thematic Capital Group staying on target toward its $100 million five–year goal.

“We expect to buy $25 million to $30 million in real estate next year,” he said. “I think we will have two to three tenant–led acquisitions, these being service companies. We are bullish on Brevard County. We are bullish on our company. And we are bullish on Florida in general.”