Apartment mixed-use community demand and innovation draw in and expand their neighborhoods.

Mixed-use apartment communities no longer are just a few stories of apartments, a coffee shop and maybe a gym or dry cleaner next to a common retail establishment or two.

Mixed-use developments have exploded and taken on a new scale, according to Allison Owens, Western Regional President for Project Management Advisors, Inc.

“Today, we’re seeing entire mixed-use communities that include residential units and retail centers, along with office, hotel, even community centers and related programming, and significant infrastructure improvements to draw residents, shoppers and other visitors,” she says.

Some of these projects are the brainchild of major technology companies who are first and foremost trying to create more affordable market-rate housing for their workers, Owens says.

“What the tech companies are doing with these massive mixed-use developments is interesting because it concedes that the old ways of living and working aren’t viable in our new hybrid reality,” she says.

“If you look at older city centers, with office space and ground floor retail, those are primarily vacant,” says Owens. 

“These developments are attempting to do something different, based on other models around the world that have shown to be successful, by developing inclusive projects that draw in and expand the community, rather than trying to create tech cities purely for workers.”

Owens says that building office campuses in what are essentially residential communities creates immense pressure on existing infrastructure and doesn’t offer the retail draw of a bustling downtown that many tech workers demand, especially when hybrid work gives them options in terms of where to work.

Google’s Diridon Station, Meta’s Willow Village and Elon Musk’s “Project Amazing” are just a few examples of massive mixed-use development projects being driven by technology companies who are thinking about creating new communities rather than just office parks.

“The concept hasn’t been proven out just yet,” Owens says, “as many of these developments are in the concept and design phase. But developers are certainly interested in partnering with these brand-name companies to bring their vision to life, and the focus on community building has taken off in multiple locations.

What residents want on day one

Appropriately phasing a mixed-use project is complex, she says.

“Many cities mandate residential components to be built first, but developers understand the need to create community, providing the retail components and community center that potential residents will want to use on day one,” according to Owens.

“There’s also considerable money to spend upfront on infrastructure, parking, utilities—all the elements that make a place functional.”

Owens says that everyone’s financial models are being challenged right now throughout commercial real estate and it’s forced the industry to take another look at conventional wisdom.

Do you build mixed-use in proximity to a dense city like San Francisco? Or will the workforce model of the future be more dispersed, as it is in Denver and Philadelphia?

“At the project level, you have to balance the desires of potential tenants in all areas with the financial feasibility of building everything all at once,” she says. “Deferring those decisions or trying to take on too much at once makes the project more difficult to get off the ground, both financially and practically.”

Street-level retail is ideal

Given the locally volatile economic state for businesses and consumers, finding and securing individual retail storefronts is fluid and changes day by day, Owens says.

“On a broader scale, we’re seeing developers refocus on street-level retail, the kind of shops, restaurants and services that make a street come alive and are essential to mixed-use communities,” she says.

“But creating ground-floor retail creates a chicken-and-egg situation where retail [stores] need the traffic of a nearby apartment complex or office building, and those residents and workers want the convenience of an established retail offering from the moment they move in.

“In general, ground-floor retail is valued for its ability to activate a street and the kind of retail offerings they deliver, like coffee, sandwiches or even an exercise studio, aren’t easily replaced by e-commerce.”

Owens says the retail mix is dependent on the development and what will activate its streets.

“Some retail concepts will work better than others,” she says. “Typically, we see smaller, street-facing storefronts taken up by coffee shops and other quick-turn food environments. A larger space on a side street might work better as an exercise studio because its customers will become familiar with the location and return if they like what is offered.”

Owens says there’s always some placemaking that goes along with creating a retail mix.

“Developers are thinking about the connection between storefronts and the residents or workers who will frequent them and how to make those spaces appear seamless,” she says.

Solving for parking

Parking is a big constraint on any development and mixed-use projects have to navigate the different required parking ratios for retail and residential components. There are also different types of parking structures and specific access for residents or office workers versus the general public.

“Not having different constituents use the same parking garage or parking level is an essential security consideration,” Owens says.

“All of these decisions are usually made in phase one of a project, especially when there’s a significant retail component, as it can be difficult to add retail parking as an afterthought.

“We are seeing some areas switch from minimum parking requirements to maximum parking requirements, but that only works in areas where there is mass transit to support reduced car capacity.”

 

 

Paul Bergeron is a frequent contributor to units.