Mixed Use

Abstract

With perhaps the exception of building a new town, mixed-use (MXD) development requires the most complex real estate market analysis. As with the structural organization of the preceding chapters on real estate products in this book, this chapter will begin with a background of the real estate product type. A background of MXDs is necessary to understand those developments that are already in place across the North American landscape. Some MXDs have been successful and others have been dismal failures. A goal of this chapter is to describe and explain the instruments hypothesized to make an MXD successful. Some MXDs are approaching their functional age of obsolescence—25 or 50 years old. They may require new real estate market analysis to guide their redevelopment and that redevelopment must be executed in the context of how they originated. The background coverage, contemporary notions of trade areas, demand, supply, and report, for MXDs are presented. What Is a Mixed-Use Development? To be defined as an MXD, the real estate project must have three components (Schwanke 1987): . . . Three or more significant revenue-producing uses (such as retail, office, residential, hotel, and/or entertainment/cultural/recreation), which in well-planned projects are mutually supporting Significant physical and functional integration of project components (and thus a relatively close-knit and intensive use of land), including uninterrupted pedestrian connections Development in conformance with a coherent plan, which frequently stipulates the type and scale of uses, permitted densities, and related items. . . . Each of the above concepts is discussed below. Three or More Significant Revenue-Producing Uses Many real estate projects have multiple uses. However, MXDs as denned and discussed here must have at least three major revenue-producing uses. These uses should be nontrivial. In other words, if retail space is one of the mixed uses, then that retail space should have a trade area beyond the mere project site. In most contemporary mixed-use projects, retail, office, residential, and/or hotel facilities are the primary revenue-producing uses. Other revenue-producing uses of MXDs might include sports arenas and convention centers, performing arts facilities, and museums.