Integrating residential, retail and commercial developments into an area enhances its overall appeal by saving space, encouraging community interaction and supporting a more sustainable environment.
Mixed-use development can be an ideal investment option for investors as it diversifies portfolios and reduces investment risk. However, mixed-use development also presents some unique challenges which must be met.
Commercial
Commercial mixed-use developments typically include buildings that combine retail spaces, offices, and residential units into one building. This project type is generally sought out in areas with plenty of land space or those seeking to maximize economic investment opportunities.
This type of project helps reduce traffic and congestion by giving people more ways to get around their city, particularly beneficial in urban settings where residents rely heavily on public transit and walking for trips such as shops, restaurants and community spaces.
Real estate-wise, multi-use developments are more attractive to tenants as they provide them with easy access to work and services nearby. Furthermore, these developments increase overall property values while simultaneously offering multiple income streams if all uses remain occupied at any one time.
No matter the profit potential, investing in commercial mixed-use developments presents some unique challenges, including needing an experienced team to oversee project timelines, complying with building codes, procuring vendors and managing them effectively.
Residential
Residential mixed-use developments combine apartments, condominiums and single-family homes with retail shops, restaurants and services nearby – appealing to millennials, families and baby boomers who appreciate having everything within walking distance – so as to provide residents with convenience when living, shopping and working nearby.
Mixed-use development offers numerous advantages to consumers as well as investors. Due to their proximity to communities, mixed-use developments provide local businesses with an established customer base when shopping or dining locally. Furthermore, physical proximity between uses encourages collaboration, connection and relationship building among both residents and workers.
Crexi’s recently published December 2022 guide provides more insight into these trends; to do so, download it now. Mixed-use development meets tenant preferences for sustainable buildings located within dense, central neighborhoods. As real estate market shifts toward urban environments, mixed-use projects stand to thrive as buyers turn towards urban living environments and establish more connected, inclusive communities for tomorrow. Crexi offers its latest guide for more details – download here now to discover more!
Public Space
Modern city dwellers increasingly favor neighborhoods that combine office spaces, leisure hubs and housing units into one cohesive design. Their close proximity allows residents to engage socially while cutting down commute times; at the same time promoting sustainability by minimizing land usage and resource consumption.
Well-designed public spaces within mixed-use developments evoke a sense of community by inviting residents, workers, and visitors alike to come together in enjoying shared spaces. This facilitates developing strong relationships among residents as well as supporting health initiatives by encouraging social interaction that may reduce depression or loneliness (Design for Health 2008).
Mixed-use development offers many advantages, yet also presents unique challenges. Construction and operational costs associated with mixing residential, commercial, and cultural components into one building may prove financially burdensome; however, phased development strategies may help overcome such barriers by increasing demand as components become fully functional. Furthermore, engaging local businesses and stable-housing advocates to identify needs and goals may prevent unintended outcomes such as displacement.
Transportation
Residential mixed-use developments provide residents with an opportunity to live, shop and work within their neighborhood reducing car trips and greenhouse gas emissions. Studies indicate that neighborhoods featuring these developments experience higher walking and bicycling than others areas; replacing vehicle trips with walking or cycling increases physical activity levels while simultaneously decreasing vehicle use resulting in reduced driving emissions and greenhouse gases emissions.
Mixing uses allows housing and commercial spaces to be constructed more compactly, which aligns with many of the goals of Smart Growth such as compact development, transportation options for all income levels, creating a sense of place, and nurturing vibrant economies.
Transit-oriented development (TOD), an approach to mixed-use development that centers around public transit stations with dense residential development surrounding them, can be an efficient means of meeting these goals. TOD can help communities meet climate action targets while creating affordable housing options and retail stores near public transport lines; reduce economic disparity; foster social cohesion; and expand racial homeownership equity.