Attitudes About Mixed-Use Have Changed Dramatically
In the past four or five years, mixed-use projects have become part of our culture, and we are embracing this asset class more as an extension of everyone’s life, say speakers at PCBC.
July 7, 2017 | by CARRIE ROSSENFELD | GlobeSt.com
SAN DIEGO—In the past four or five years, mixed-use projects have become part of our culture, and we are embracing this asset class more as an extension of everyone’s life, said speakers at PCBC here last week. Panelists on the session “The Magic Cocktail of Multifamily Multi-Use” said the desire for mixed-use projects goes along with the urbanization, walkability trend that has swept the nation.
“Creating lifestyle destinations 24/7 that people never have to leave” is how Kim Hoeksema, XVP development execution for Carmel Partners, described today’s mixed-use development. She added that, in addition to work and home, it’s important to have a “third place” in the project that’s an extension of people’s lives, such as a yoga place or restaurant. When you have the right amenities, people will buy the cheapest residence in order to be in the center and take advantage of those amenities.
Kimberly Byrum, principal, advisory with Meyers Research, said it takes time to harvest the benefits of mixed-use performance. These projects are more volatile than single-category projects, but the rent growth around mixed-use is around 120 bps higher than with regular multifamily projects, and the actual rent premium compared to straight multifamily in an urban submarket tends to be more than $200. But, said Jonathan Cox, SVP development for Avalon Bay, it costs more to deliver this product because the concrete plinth required is costlier than the slab on grade of straight multifamily projects, creating additional incremental costs. “There’s a fine balance between costs and returns on mixed-use since the retail costs much higher than retailers are used to.”
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