While urban regeneration across the Midwest continues to fuel investment in cities and their surrounding neighborhoods, the pandemic has shifted work patterns and brought the demand for hybridized environments into sharp focus.
As city dwellers increasingly seek spaces that maximize convenience and connection, mixed-use developments can unlock potential by offering variety and vibrancy under one roof.
The Rise of Live, Work, Play
Mixed-use developments–environments that blend retail, restaurants, offices and residential spaces–are not new to the real estate landscape: they have been a popular choice for over a decade. Properties that blend commercial and residential space offer a live, work, play model to locals, who can enjoy proximity to recreational outlets for eating, drinking, shopping and entertainment.
In many ways, the live, work, play model takes what is attractive about a city lifestyle and maximizes it. Urban settings are exciting places to live because residents can walk from place to place, enjoying proximity to work and amenities like shops and restaurants. In mixed-use developments, office workers can leave work and find themselves a few feet from bars and fitness centers. Residents can shop, eat or grab a drink just minutes from home.
Consumers benefit from walkable environments, eliminating long commutes. Less driving means more walking, promoting a healthy lifestyle, minimizing pollution and creating more time for connection with family, colleagues and friends.
With everything they need close at hand, communities can enjoy increased convenience, connectivity and vibrancy in an environment that naturally attracts new residents and customers.
As COVID-19 reshaped work/life patterns, it also brought about a surge in online sales, prompting a re-evaluation of the benefits of brick-and-mortar retail spaces. In-person shopping allows retailers to connect with customers and offer personalized experiences to particular communities. To tap into this, retailers are taking the mixed-use model further.
Hybridized retail models allow business owners to curate consumer experiences, combining multiple, desirable opportunities under one roof. Customers can enjoy a coffee while shopping for clothing, sample wines while visiting an art exhibit, or browse for records in a local brewery.
By adding second or third components to commercial spaces, business owners can enjoy the benefits of multiple revenue streams while keeping overheads low. Consumers who would have had to travel to several different locations can now take advantage of multiple experiences in an immersive environment that can evolve from day to night.
Curated events are on the rise, too. Gyms offer guest DJs and special classes, and restaurants and bars hold themed events targeting specific markets.
Residential spaces also reflect these shifts. The lockdowns of the pandemic have emphasized the value of socially enriching experiences. That means a rewrite of how residents use community spaces like gyms and wellness centers.
Property managers are now partnering with companies specializing in curating tenant-focused events, like fitness classes, to activate shared spaces, increasing the value offered to tenants.
While both urban and suburban communities benefit from mixed-use models, the fast pace of an urban lifestyle calls for spaces designed for evolution. Hybrid models of retail and recreation offer diversified income streams to business owners. Consumers, meanwhile, benefit from convenient and vibrant experiences and increased opportunities for connection.
The pandemic stimulated a new understanding of urban environments: what they offer, what they lack and how they can evolve. By promoting flexible models of living, working and doing business, mixed-use developments can meet the shifting needs of city dwellers today and prepare urban spaces for the next phase of revitalization.
Engaging a full-service CRE partner like Farbman Group can help spark positive change within your investments. Contact us and get in touch with an expert today.