Moderator: Robert Clippinger, President at Clippinger Investment Properties
Developers can agree that mixed use projects can be challenging in the simplest of circumstances. This roundtable will focus on the following:
Why mixed use?
Why does it work?
When does it not work? Socio/Economic?
Financing Mixed Use
How do retail/restaurant/residents cohabitate?
Picking the right retail/restaurant
• Managing Mixed Use
A good, well planned mixed-use project can be beneficial for everyone involved!
From the city, developers, lenders, residents, and retailers, everyone can profit. In this month’s discussion, we heard from the expert Bob Clippinger. (Bio attached)
So why do mixed use projects work? Mixed use projects can attract better tenants, lenders and retailers. Landlords can charge higher rents from tenants and tenants can benefit from the wide range of amenities they can be offered (i.e, coffee shop/mini mart/restaurant). Mixed use projects can also be beneficial to the city because they can create a more “neighborhood feel”- food brings everyone together!
In fact, mixed use developments can alleviate many service needs by providing parking options, convenient retail, accessible restaurants, and residential living quarters all throughout a walkable area. Walkability (walk scores) are popular once again – people prefer this over driving/commuting to different places so from an urban planning perspective, they offer efficiency and a decrease in traffic congestion.
When deciding on developing a mixed-use project, there are some consideration to keep in mind from financing to retail and resident cohabitation. Lender relationships are important because mixed use projects are complicated. Most commonly the 80/20 Rule apply but things can get tricky if you are not properly prepared. Pre-leasing can make the lending process easier, however, if that becomes an issue, there’s always other kinds of loans such as mezzanine.
Can we all get along?! That is, how can your residents and retailers cohabitate? Devil is in the details. According to experts, the best way is to plan ahead and define the terms of the lease clearly to all parties. Make sure your tenants are aware of where they are living. Smells and noises can be an issue so a developer can bypass this matter by making sure not to take on any Ethnic foods as a tenant and ensure your ventilation system works! Hiring an acoustics specialist can also save you a lot of headaches down the line. As far as your retailers, they can’t complain if you pay for cleaning or CAM, you’re getting 90 units of residents, and there’s nothing like foot traffic for any retail business.
For more information regarding this topic or Opus Connect, contact Rebecca Pedooem at Rebecca@opusconnect.com