Mixed-use properties are intentionally developed in a way that they cater to more than just residential or retail shops. These mixed-used properties can cater to several different audiences, from residents to office space holders to retail shops, schools, etc. can all come under one umbrella. They are not necessarily under the same roof but inside the same property complex.
These surely are trending all across the globe. But why? This happens because the present generation of residents wants most of their everyday amenities to be closer to home. From kids' schools to their offices and shopping malls, they would rather have everything inside their housing complex than spend extra time traveling to individual locations for every one of them.
Montgomery Planning conducted research and found out that between 2010 to 2020, more than 50% of properties developed in Montgomery, Alabama alone were all mixed-use properties. The other projects in the pipeline, including commercial and multi-family buildings, also had an apparent inclination toward mixed-usage than single-use residencies. This study also believes that the national trends are similar to that of the Montgomery area findings.
If you are a real estate developer, manager, or owner, you need to pay close attention to the rising trends of mixed-use properties because they are the new big thing in the market. It is trending, and it is here to change the way people view real estate. Read this article to find out all about this trend and how you can use it to benefit your real estate business.
What is driving the mixed-use property trend?
Mixed-use properties are mostly rising due to the new lifestyle choices of the present economically-active generation. This primarily includes the millennials and Gen-Z, who have demanding jobs and not enough time to spare for other activities. So they demand to have these activities right at their doorstep to get the best of both worlds.
According to a National Association of Realtors (NAR) survey on community and transportation preferences, they found that more than 62% of millennials prefer to have all amenities within walkable distances. Beyond that, there are 5 more factors driving this trend. Take a look.
Urban development
Mixed-use properties are one of the major developments in nearly all metropolitan urban habitats like Ohio, Boston, Texas, and more. The high migration of millennials and baby boomers into these cities due to employment and other opportunities are increasing by the day. Even neighboring suburban areas are getting urbanized, and properties offering amenities beyond simple residences are becoming increasingly attractive.
Change in lifestyle
Big brands and chain retail stores are no longer the only places of attraction for millennials. They are increasingly indulging in one-off boutique and localized stores. Providing these services under mixed-use properties is helping this generation sustain this lifestyle change.
Concept of co-working spaces
With the abundance of technology selection available for the new generation, their office attendance decreases. Extended remote work is also playing a part in this trend. But not everybody prefers to work from home constantly; some prefer to work from casual workspaces like co-working spaces. Residencies that offer additional facilities of leisure combined with workspaces are becoming a rage.
More sustainable
More and more CRE business owners and investors are going for more sustainable real estate options for a more eco-friendly business approach. According to Forbes news reports, the real estate produces more than 40% of the total global carbon emissions. Having more facilities under one complex helps bring down the overall carbon footprint of managing properties when people cut down on their everyday travel due to most resources being available at walkable distances.
Demand for homes closer to work
Research says due to the advance in remote work, employees are saving thousands of dollars on the commute, and now they desire to live close to work or even live in the same complex as their offices. This allows them to save up on a lot of money and reassign that to rent or other basic amenities, increasing the demand for mixed-use properties.
Benefits of mixed-use properties for CRE biz
As a real estate property manager or business owner, investing in mixed-use properties has many benefits. Check them out.
Broader appeal
Your properties can now appeal to a larger audience and collect more on rent from families to single working people and even migratory working class. This has a higher chance of selling if your property can cater to a larger audience.
Integrated management
There are multiple different types of facilities and amenities to manage in a mixed-use property. You need proper property management software to get the job done. Integrating software like Yardi or MRI can help solve this. They can manage residential, commercial, and retail properties at the same time and streamline your tenant and property management work. You will not need to run to and fro to different properties to get the job done; you can do all of it from your user dashboard, even from remote locations.
Diversified business
A mixed-property has a diversified business portfolio, so it can help you sustain during tough economic crises. You can collect revenues from multiple avenues without solely depending on one source. Even if your retail does not work, your residents are still there or vice versa.
Cons of mixed-use properties for CRE biz
There are some slight disadvantages of a mixed-use property. But they can be easily mitigated if addressed at the right time, and your leadership and strategy are planned accordingly.
Can cause parking issues
Due to multiple facilities being under one community, the number of cars will increase; with poor management, this can become a real issue. Retail shops and family parking should be managed separately to avoid any hindrance.
Residential tenants might be agitated
Mixed-used properties can create major conflicts between commercial and residential tenants without efficient property management due to differences in interests. You need a proper technology selection and high-functioning property management software to work around this crisis.
Need a Property Management Software that's Right for Your Needs?
Are you planning to invest in mixed-use properties? Need to plan strategy and leadership for this new venture? Our team can help.
Or are you wondering which property management software will work best in letting you streamline the management of such mixed-use properties? Our technology selection and implementation advisory team can provide you with the best solutions for such business needs.
Talk to us today to know more about our work.