Timing It Right in Mixed-use and TODs
A recent joint research study by National Real Estate Investor and Retail Traffic magazines found that mixed-use is the dominant retail property type for both new development and redevelopment projects among retail developers. Of 329 respondents, 28% said they had developed mixed-use projects in the previous year.
Looking ahead, a majority of respondents (52%) said they plan to develop mixed-use projects (not necessarily with residential, however).
One of the stickiest issues with mixed-use and transit-oriented developments (TODs) is getting the timing right. “Which comes first, the housing or the residential?” asks designer Kelly Davis, OZ Architects, Denver. “It's a chicken-and-egg situation. Do you build the residential first and get built-in demand, or do you build the retail to attract the residents?”
Davis thinks the best way is to do it all at once, but he recognized that that takes a lot of capital. Davis is designing the eight-block, 152-acre Colorado Crossing town center in Colorado Springs. “We've been going back and forth with the owner,” Sunshine Development's Jannie Richardson, says Davis. “Maybe we'll build it out from the center.” Plans call for 1,600 housing units, three hotels, a water park, and a church.
Bill Heath, project manager with HOAR Construction on The Mercato in Naples, Fla., says there's a special level of complexity with mixed-use projects. “If you've sold a bunch of condos in anticipation of retail, and you don't have the retail, then it's an issue,” he says. “You have to commit yourself early to what you're going to do, and you may not have all the information you need to make those commitments.”
Sanford Steinberg, Steinberg Design Studios, Houston, says: “Mixed use is hot hot hot right now. We have five or six on the board,” including The Triangle, with 450 rental units, 50,000 sf of retail, and a three-acre city park in Austin, and another 100,000 sf of retail with 80 rental units in the works.
Steinberg believes there are certain formulas that work for mixed-use. “You've got to go into a neighborhood where there's already retail,” he says. “I've been approached by retail architects who want to bring in a residential architect to assist. The residential has to be secondary to the retail when you're in the outlying area of a city. Establish the retail basis first, with a town center concept, then add the residential.”