Mixed-use development is gaining significant prominence in the real estate world. Rightly so, these innovative projects combine residential and commercial spaces, creating dynamic communities. Plus, mixed-use properties combine multiple uses – such as retail or office space to meet the growing consumer demand.
Mixed-use development is also one of the growing trends of urbanization. Most importantly, it has revolutionized urban planning and is changing the way we work, live, and play.
The development type can be an attractive opportunity for brokers and investors. As the preferences of urban buyers have changed, brokers can leverage the trend to their advantage.
Also, investing in these properties is ideal for long-term investments as the appreciation value can increase with time. Let’s put some light on the topic and see how it can help from a broker’s perspective.
Benefits of Mixed-use Development:
One of the main benefits of investing in mixed-use development is the diversification of revenue streams, as building with multiple amenities reduces the need to rely on a single source.
For instance, a building with commercial and residential space will remain profitable even if the value of commercial spaces declines. If the residential value is high, it will mitigate the risk. With an appreciation in property values, you can expect long-term financial gains.
Besides lowering the risk, the project offers higher income, lower consumption, and longer leases. From a positive investment perspective, they are the best bet.
Even tenants demand the properties because of access to different resources. In short, it can help to promote sustainable and inclusive communities.
Vibrant and lively comminutes can foster growth. Besides, these communities bring together people from different areas of life. The integration of residential, retail, and commercial spaces fosters a sense of unity.
As a broker, you can leverage the advantage of mixed-use development and sell properties with a similar concept.
Mixed-use Development Types:
You must know about mixed-use construction and the unique features they offer.
Residential Retail
Have you noticed a residential building with a commercial space? It is the most common mixed-use property type that features a blend of commercial and residential spaces.
Basically, it includes different apartment complexes with retail shops, cafes, and offices. Residents staying in the vicinity have access to many convenient essential services.
Also, some complexes have in-house entertainment options, making it more convenient for homeowners. Infact, residential commercial mix is the most demanded property type.
Residential Office
Residential units with office spaces are the new fad in real estate. Even brokers can take advantage of this mixed-use development to sell different property types. The property type integrates office spaces and residential units.
Plus, these units are ideal for professionals – who prefer to live close to the workspace. If you stay close, you can work from your space or commute to the office in the same complex. Besides saving time, it offers complete convenience.
Also, the residential office developments offer shared amenities to buyers.
Ideally, they can use co-working spaces and meeting rooms alike. Residential and office spaces can be a selling point for brokers.
Residential Commercial
Now for the retail and residential spaces. These are properties with retail stores on the ground floor of residential complexes. In these complexes, different residential units are combined with retail spaces.
Further, these co-spaces create a convenient shopping experience for residents, staying in the complex, as the ground floor of the complex is occupied by supermarkets and retail stores.
Notably, it is a selling point for brokers. They can market the property based on shopping convenience and other amenities. The best part is that this setting allows residents to meet their shopping needs without leaving the complex.
Some Considerations in Mixed-use Development:
With benefits, you must know about the challenges and considerations of mixed-use development.
Increased Market Research
Developers must ensure that development has a correct mix and uses do not create conflict in the future. Confused? The conflicting issues between residents and commercial owners can result in some issues. Also, if there is a conflict between commercial and residential tenants, it can result in a low occupancy rate.
Ideally, developers must focus on choosing the best market for mixed-use projects. At times, factors like shifts in consumer desires and economic uncertainty can impact mixed-use development projects.
High Upfront Costs
If you are a broker, you must know that mixed-use development costs are higher than a single building. Developers have to spend more because of the complexity involved in the building project. The mixed-use projects are complex because of infrastructure, services, and amenities. These factors can increase the construction cost.
Also, mixed-use projects are more difficult to finance than residential complexes. Developers have to invest in these projects to get the desired returns. That said, with the demand for mixed-use projects, developers can expect profits in the future.
Longer Project Timelines
As the construction and design of a mixed-use project are complex, it takes longer to build the complex. Some complexes are challenging because of architecture, so it increases the project timeline. However, the development team should coordinate with teams and stakeholders to ensure the project is completed on time.
Mixed-use projects in urban areas are subject to regulatory guidance, which developers should be aware of. As a broker, if you are selling these projects – you must adhere to the timeline.
Don’t give false promises to home buyers about the timeline. Know the date of the complexion before you finalize the property deal.
Investing in mixed-use development
Investing in these projects can be less risky than a single project. How? The appreciation value of these projects is high, so you won’t be at a loss even after selling the space.
Be sure that when you invest in a project, you get the convenience you wish to seek. Besides aesthetically pleasing space, you can look for a space that combines retail, residential, and commercial projects.
Mixed-use properties offer flexibility in spaces, so leverage it to your advantage. As a broker or investor – you can use these spaces to earn commission or investment return.