What is Mixed-Use Development and why is it Beneficial?

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Mixed-use development by definition is the creation of a development containing more than two industrial, institutional, commercial, cultural, hospitality or residential businesses mixed together. They come in many different shapes and sizes, including everything from a high rise building to single-story neighborhoods.

In fact, mixed-use development has been growing in popularity over the past few years. However, it is not a new concept — it dates back to Pompeii in Ancient Rome when the Romans created mixed-use spaces for their communities. With the growth of cars in the industrial age and stricter zoning laws in the middle of the 20th century, mixed-use designs began to take a back seat. Now, with certain areas growing in population, such as Phoenix growing at 1.27% annually, mixed-use communities are becoming more attractive for city planners and developers.

Here are some benefits to developing a mixed-use property.

 

Efficient Land Use

In the United States, metropolitan areas are growing in density. While Phoenix still has some undeveloped land, many in demand areas already have existing buildings due to how the city has grown throughout the years. Having a mixed-use property can help use the land to be used more efficiently by having apartments or condos above retail stores or offices. It creates a walkable sense of community and it’s convenient for people.

 

High ROI for Mixed-Use Development

There have been studies done by NAIOP that owners can charge a premium rent for spaces in mixed-use development spaces. It is estimated that commercial rent can be 6% to 12% of the purchase price of the property, and residential leases can be 1% to 4% the purchase price of the property. This is because the younger demographic is attracted to the sense of community mixed-use development creates.

 

All Demographics Like Mixed-Use Development

The younger demographic of Millennials and Generation Z adults, which take up 50.7% of the population, are attracted to mixed-use real estate for its environmental sustainability. However, not to exclude the older generations, seniors are also attracted to mixed-use properties because of the limited amount of walking or driving distance to all of their amenities. [CL8] 

 

Good For the Greater Phoenix Metro Area

AZ Big Media has stated that mixed-use properties can improve Phoenix’s retail future. With the additions of projects such as Park Central and SkySong, The ASU Scottsdale Innovation Center, these developments are sparking job creation in the Valley and giving residents a sense of community.

 

Plaza Companies Can Help with Mixed-Uses

At Plaza Companies, we specialize in mixed-use spaces across the Phoenix Metropolitan area. Whether you’re looking for management, leasing, brokerage, or development services, we can help you maximize your profit while investing in mixed-use real estate in the Valley. Contact us for all your development and leasing needs!

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Whether you are looking to us for management, leasing or development services, we can help you find the perfect space. With almost 40 years of experience, you can trust Plaza Companies to assist you with your real estate needs.

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