Mixed-use developments are becoming more and more common across the country, as people of all ages desire more of a 24/7, live/work/play environment. Once looked at as troublesome because of their high costs and the challenges of putting together different commercial real estate sectors under one roof, they now seem more accepted by developers.
Downtowns around the country are especially seeing more of this building, with all age groups opting to live in city centers.
Multifamily Executive recently reported on some of the hottest retail concepts that are being mixed with apartment buildings. It pointed out that that coffee shops, non-chain outlets, dining establishments, gyms and locally flavored retail stores are all trending, making a lot of city dwellings seem like hotels. This isn’t just happening in places like Manhattan and Chicago, though. The publication referenced concepts around the Ohio Valley and in up-and-coming Detroit. Hot concepts mentioned in these developments are Blue Bottle Coffee, eyewear chain Warby Parker and an expanding Mexican street-food concept called Bakersfield.
Adam Robinson, a founder, and president at San Diego-based development firm RAF Pacifica Group said in a recent column that mixed-use developments are becoming one of the most popular property types, in part, because they solve land-use issues in space-constrained locales. One-use facilities are not working as well with the increased advent of walkable communities, as opposed to building multiple facilities on different plots of land that perform different functions.
Plus, he said, the end user prefers these types of spaces. Who wouldn’t prefer to walk out their front door and go grocery shopping or to a coffee shop, rather than get in their vehicle and fight traffic to do a routine task – or even go to the office?
Finally, he pointed out, that from an investor standpoint, it is always best to have diversity in a portfolio. While multifamily might be strong one year, office uses could overperform during a different time period, and all of them together can lift up performance if a property is correctly leased.
A few years ago, Bisnow provided a list of several important mixed-use assets in the countries under development, and now many of them are currently operational. They leave little doubt the success that these developments can have and that, if properly planned, can be a further wave of the future.
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