How CRE Brokers Can Market Multi-Use Developments

Picture this: your multi-family residential tenant gets ready for work and decides to grab a cup of coffee at the coffee shop downstairs from their apartment before work. If they don’t work within walking distance, their commute consists of a short walk to and from the trolley, with a short ride in-between. When they’re done for the day, they grab dinner at one of the restaurants underneath their apartment or head to the gym which is also within the vicinity. An increasing number of those living in the city value one thing above all…convenience.

Why is this lifestyle so appealing?

Those living in the city value convenience and the infrastructure to support this is multi-use developments. Those who desire convenience would rather live in the same area that they can dine, shop, and even work. They would prefer whatever they need to be a short walk away. In large sums millennial's, and even baby boomers, are flocking to urban areas rather than the suburban sprawl that has been previously popular. These properties are even becoming increasingly popular with developers who desire a mix of various asset classes, providing an increased feeling of stability with the fluctuation of the commercial real estate market.

How mixed-use development is changing cities.

The expansion of the trolley has already spurred developments in the UCSD area. The rendering above shows the mixed-use development already under construction at UC San Diego, the community is designed to incorporate residential, academic and administrative space.

San Diego has seen a recent increase in the development of multi-use properties, which often incorporate retail, office, and residential spaces. The urban feel, that was previously exclusive to the Downtown area, has slowly crept up on the more traditionally residential areas of San Diego. The upcoming increase in multi-use developments can be attributed to The San Diego City Council’s recently approved amendment to add a sixth development zone category aimed at spurring high density housing developments near public transit and employment areas. The San Diego Trolley expansion will expand transit past Mission Valley all the way to the La Jolla UTC area. This expansion in conjunction with the amendment are sure to bring new mixed-use development from Bay Park to UTC, and all areas the trolley passes.

The proposed mixed-use 156-unit complex will be located right across from the future Clairemont Drive trolley station along the Mid-Coast Trolley line.

Bay Park is already in the process of planning a new multi-use development, called Bayview Plaza. It will introduce 156 mostly market-rate apartments and 40,000 square feet of retail and restaurant space. The view of Mission Bay or the openness of the landscape may be the stand out amenities of the property, but the development is being used as a model for transit oriented development. Bayview will sit right across from a Mid-Coast trolley station, making it a model for convenience. If you don’t work in the vicinity of your where you live, then you can easily take public transportation.

How does this affect commercial real estate?

The increase in mixed-use development is not only subject to the San Diego area, but any metropolis with population increases. That leaves the industry with an opportunity to put all hats into one bucket; commercial real estate agents can now broker a sale, set up a lease, and manage a property for any space like commercial, multi-family and office space.

How can agents market the benefits of buying or leasing these spaces?

1. Emphasis on community

These communities create a blend of shopping, eating, working, living, and community. These development also serve as "lifestyle centers" that bring a new sense of community to suburban areas that aren’t the mall. They provide a place for people working in the area to also enjoy the area, from a post work happy hour to a workout before they start the day.

2. Increased exposure for retail and food tenants

Potential customers who either work or live in the vicinity of a retail outpost have no choice but to consistently pass by a brick-and-mortar. This brings consistent exposure to these retail stores, and in this day of convenience the right location is essential for retailers to stay competitive. The consistent foot traffic in an area can serve as a means of advertising for a new business that can benefit from the exposure.

3. Convenience for residential tenants

Residents who choose to live in multi-use areas value convenience. The ability to live in the vicinity of the grocery store, the gym, restaurants, and work is an increasingly sought-after amenity. The desire to live near public transit has increased as more people are becoming environmentally conscious or may want to save some money through cheaper transportation options, such as the trolley.

4. A selling point for employers

Employers may be more attracted to a mixed-use property with the assumption that it may bring in more collaboration, increase workday focus among employees, and attract their intended pool of talent. When office work spaces are found in the vicinity of retail stores, gyms, and restaurants then work, life and entertainment can become more closely intertwined.

5. Safe investment for owners and developers

The combination of different asset classes within one site can be beneficial to owners when one industry may experience a decrease, the others can carry the weight. The ability to use a space for multiple purposes allows owners to increase interest from multiple prospective tenants.