Mixed-use developments, which maximize land use and facilitate the creation of vibrant, walkable communities, have gained significant popularity across the world in the last few years. As Joe Cianciotto mentions, such projects tend to combine commercial, residential, and at times even industrial spaces in one development. They are designed to provide a one-stop destination for people to live, work, and play.
Joe Cianciotto Offers an Overview of Mixed-Use Developments
Mixed-use developments combine residential, commercial, and recreational spaces within a single project. Such an integrated approach provides multiple benefits, both for developers and communities. As urban landscapes evolve, the rise of mixed-use developments has become all the more prominent. These properties allow for the creation of vibrant, multifunctional environments. Multi-use developments typically follow three tenets:
- They foster compatibility of land use
- They have multiple revenue-producing uses, which can be residential, office, hotel, retail, and cultural.
- They create a pedestrian-friendly community with uninterrupted pedestrian connections.
The integration and density of mixed-use developments also attracts people from other neighborhoods owing to the multiple functions within one development. These properties can be built either vertically or horizontally:
- Horizontal developments: Much like strip malls, horizontal mixed-use developments include multiple single-use properties. Such buildings tend to serve complementary functions, and may or may not be connected. For instance, B and C-class malls might be redeveloped into a group of retail stores, offices and apartments. Even though horizontal mixed-use developments do exist in cities, they are more common in suburban areas where there is more space.
- Vertical buildings: Space is limited in densely populated areas. In major cities like Seattle and New York, it is next to impossible to expand out. Hence, developers can only expand up. Such large cities usually have many vertical mixed-use buildings, which contain different property types within a single structure. Multifamily units are generally located on the higher floors of such buildings, while commercial space like gym or coffee shop can be found on the ground floor.
There are many interconnected and mutually reinforcing economic factors that drive mixed use development, such as:
- Rising construction costs: Rising construction costs have pushed developers to explore ways to maximize returns on increasingly expensive land parcels. Today traditional single-use developments have become less financially viable, and the interest in projects that stack multiple revenue streams through varied uses within the same footprint has significantly gone up.
- Benefits to retailers: The evolution of retail patterns has catalyzed mixed use adoption. As traditional retail businesses face competition from ecommerce, many property owners choose to pursue development models that can create built-in customer bases through residential and office components. Mixed-use developments can provide retailers with better foot traffic as they often have a “built-in” customer base.
As Joe Cianciotto points out, demographic shifts toward urban living, as well as changing workplace preferences have created natural synergies between commercial, retail and residential uses. A large number of millennials in large cities today prefer mixed use properties, as they generally walk or use public transport to get from one place to another. Overall, the preferences of the millennials are among the prime factors contributing to the rise in demand for mixed use properties.
