As we inch towards the end of 2022, the narrative around real estate and development remains the same: these industries have been drastically impacted by the pandemic and will continue to be. Many people are still working from home, leaving office buildings vacant. The residential real estate market is more competitive than ever with rising home prices and interest rates. Dining and hospitality spaces are forever changed to accommodate cleanliness and touchless experiences. The list goes on.
There is one sector of the real estate industry that is currently making a huge return: mixed-use development. The lines between work, life, and play are blurred as mixed-use developments are embraced. People want more interconnectivity. Now more than ever, mixed-use is on the rise, activated by changes and trends we’ve seen since the start of the pandemic.
What is “Mixed-Use”?
By definition, mixed-use is “a kind of urban development, urban design, urban planning, and/or zoning type that blends multiple uses, such as residential, commercial, cultural, institutional, or entertainment, into one space, where those functions are to some degree physically and functionally integrated, and that provides a pedestrian connection.” This type of development can be applied to a single building, block, or neighborhood, and can promote interaction and collaboration within communities. Revitalizing underutilized space and creating a circulation of the local community are just two ways in which mixed-use developments can provide real benefits.
A great example of a mixed-use development is The Concord in Des Moines, Iowa. Developed by DEV Partners, SHYFT is partnering with the developer to bring this historic property back to life after years of neglect. Originally constructed in 1919, the development is comprised of two buildings – the Concord Apartments, a 5-story multi-family property housing 42 efficiency apartments, and the Concord Commercial, a 2-story mixed-use property. The commercial property was built to serve the residents of the rapidly growing neighborhood, serving as a bakery and grocery for most of its life before becoming mostly vacant in recent decades. The goal of this historic rehabilitation is continued multi-family and commercial use, carefully balancing the preservation of historic integrity against critical infrastructure and safety upgrades that are necessary to retain its function. Modern-day electrical, mechanical, and life safety systems will largely replace the existing 100-year-old infrastructure; vastly improving living conditions and building efficiency for its new residents, while reactivating the center of 18th Street. Once complete, The Concord property will be reconnected to the historic and urban spirit of the Sherman Hill neighborhood in Des Moines and will become a place where people want to live and work for years to come.
Adaptive Reuse + Mixed-Use
One of the biggest trends we are seeing in mixed-use developments is the adaptive reuse of existing buildings. This trend is sharply due to the considerable number of companies that are questioning the future useability of their large office space, which was certainly driven by the pandemic. As work becomes more hybrid, the conversion of office spaces is largely due to the increased convenience and comfort of working from home. Adaptive reuse usually involves buildings with small or abnormal floor plans and outdated infrastructure. These structures are great candidates for mixed-use. In most cases, you will see a commercial or retail space at street level, with the upper levels being repurposed for residential use. Creating retail or commercial at street level revives the building, connecting it with the neighborhood and passersby. With apartments or condominiums on the upper floors, this creates a sense of permanence. If you walk down the street to your favorite coffee shop, odds are there are apartment units above or attached to it. And who doesn’t want to live right next to their favorite coffee shop? An office building has occupancy for only 8-10 hours a day. If renovated into a mixed-use development, this building could see occupancy 24 hours a day, creating more density and flexibility for urban areas.
Another adaptive reuse + mixed-use trend we are seeing all over the country is the conversion of historic warehouses to mixed-use apartments and retail buildings. Many industrial districts are located within a city’s center, containing blocks of warehouses, making them prime candidates for revitalization. Most big cities have an industrial district - North Loop (NoLo) in Minneapolis or River North (RiNo) in Denver are some examples – and they are almost always a hub for revitalization, arts, culture, and start-ups. Former industrial districts have the potential to respond to greater societal needs and become community-centric neighborhoods. Adaptive reuse of these districts, while considering the history, can help to revitalize and enrich the local community.
Benefits of Mixed-Use
As mixed-use development continues to grow, its benefits are hard to overlook. There are a couple of notable advantages, including:
More Vibrant Communities – Mixed-use tends to offer an array of amenities for both residents and employers. Employers are more attracted to a property that offers amenities their employees will enjoy, such as attached coffee shops, retail shops, or restaurants. For companies looking to relocate and/or get their employees back to the office, perhaps a mixed-use location is just the ticket. Apartment dwellers want to live somewhere close to their favorite bars, restaurants, and retail shops. In urban areas, the blend of uses creates a sense of place and purpose, somewhere that people want to shop, work, dine, and gather. Mixed-use developments can help serve as an anchor for a community – a “lifestyle center” for everyone to enjoy.
Better Walkability for Improved Health – Mixed-use developments are intrinsically more walkable than traditional developments. Nowadays, residents are preferring walkable neighborhoods and communities, according to a survey by the National Association of Realtors. There’s a term called “20-Minute Neighborhoods”, which refers to a community where residents can access shopping, health facilities, grocery stores, transportation, dining, and other services all within a 20-minute walk or bike ride from their home. As we work to create a better and more sustainable planet, we must reduce our carbon footprint and rely less on cars for transportation. Mixed-use properties can help 20-minute neighborhoods become a reality, creating better walkability and a sense of belonging for residents and workers.
The future can be unpredictable, but it is almost certain that mixed-use will continue to be an exciting real estate development trend. People need somewhere to work, somewhere to live, somewhere to shop, and somewhere to eat and drink. Why can’t they accomplish all within the same development? Individuals are seeking convenience, a sense of community, walkability, vibrant neighborhoods, and mixed-use developments are the answer.