The real estate industry constantly changes, leading to various patterns and trends.
One trend that is increasing in popularity is mixed-use developments. These developments are creating convenient, walkable communities. Residents can live, shop, work, and socialize within these developments, cutting travel times and improving quality of life.
It’s a beneficial trend for developers because they can maximize the land and promote sustainable building practices. By combining different property types, developers can increase revenue streams while reducing risk through diversification.
Whether you’re a builder, developer, or real estate professional, keeping an eye on this trend can help maximize budgets and revenue. Here is what you should know, particularly as a real estate developer seeking the next big opportunity.
A Closer Look at Mixed-Use Developments
If you’re a real estate developer, you know that rising costs remain a hurdle. The industry needs a shift, and mixed-use developments are one potential solution.
Urban spaces are evolving, making mixed-used developments an attractive option for investors. Combining residential, commercial, recreational, and sometimes even industrial uses within the same development offers diversification and resilience — not to mention the appeal to tenants.
While this concept isn’t new, it is growing in popularity and will likely play a pivotal role in the future of real estate. These developments differ based on varying designs and layouts — for example, combining retail districts, mixed-use hotels, and live-work spaces.
Vertical vs. Horizontal Mixed-Use Developments
Depending on several variables, often focusing on available space, mixed-used developments can be vertical or horizontal.
- Vertical developments are often designed to have stores, a gym, or a coffee shop on ground level and multifamily units on top.
- Horizontal developments include multiple single-use properties, which usually serve complementary functions. They are more common in the suburbs, where there is more space.
Benefits for Real Estate Developers
Mixed-use developments are providing many unique opportunities for developers and communities. If you’re considering the value of multi-use developments, here are some of the top benefits.
Create Vibrant and Walkable Neighborhoods
Designing and building walkable mixed-use neighborhoods is an attractive business play, as it allows residents to live, work, shop, and dine in a community designed to increase quality of life while reducing environmental impact.
Based on the design of these developments, they create a strong sense of community that many are attracted to. There is also enhanced marketability due to the variety of amenities and lifestyle options. Of course, these developments require planning and research. The goal is to maximize land use and infrastructure while achieving economic growth,
Enhance Property Value Through Diversified Land Use
Combining residential and commercial spaces within a single development can achieve higher property values. These higher values are driven by convenience and accessibility. Since developers can generate income from commercial leases and residential rentals, this also helps reduce financial risk. When bringing investors on board, opportunities for higher property values and greater diversification can be highly advantageous.
Maximize Land Efficiency and Reduce Urban Sprawl
Mixed-use developments are ideal for those who want to showcase a sustainable brand. Since these unique neighborhoods reduce urban sprawl and promote sustainability, they are an excellent opportunity for environmentally conscious real estate developers — especially when combined with eco-friendly construction materials.
Meet the Evolving Lifestyle Demands of Modern Residents
Urban modern living continues to be an upward trend, with spaces designed to become places people want to be (and stay). These developments are often heavily human-centric by design, with sustainability and technology at the core of it all.
With mixed-used developments, there is a sense of inclusivity and balance, offering opportunities and amenities that meet evolving lifestyle demands. People want greater convenience, so these walkable “live-work-play” environments are in demand. Real estate developers have unique opportunities to improve work-life balance for those in these communities. These projects are an excellent addition to any real estate portfolio.
Consider the Potential of Mixed-Use Developments
Real estate developers should consider the potential of mixed-use developments for future projects, starting the planning process as soon as possible. You’ll need to know your market, choose a location, and begin the design process — all while innovating for sustainability.
A major part of that process is having the right team. Each step requires varying backgrounds and skill sets. For example, bringing on a project manager, skilled construction crews, and those who handle stakeholder relations will all be relevant. There are many moving parts, so you need to source top talent to assist throughout the process — from the planning and execution of a new development to the actual building process.
At MRINetwork, our global organization specializes in recruitment and talent strategies, helping real estate developers find the right people for their businesses. If you are ready to embark on a multi-use development project, MRINetwork can help.
Dive deeper into the capabilities of MRINetwork and contact our team to get started.