Mixed-use developments gaining popularity
It’s called mixed-use, and it’s being encouraged more often these days, particularly by local governments and planning agencies, because it can help improve an area’s livability. Tenants don’t have to drive to the grocery store or coffee shop. That kind of commercial development can be located in the building in which they live, or in one just down the block.
“If it’s done right, it can create a more vibrant environment within the project itself,” said David Malmuth of I.D.E.A. Partners, which is behind an ambitious mixed-used project in the East Village. “Ideally, you want the uses to complement each other. You want people who are living in your residences to be able to go to your restaurant.”
A number of large-scale mixed-use projects are either in the planning stages or under construction. I.D.E.A. 1 – a six-story building that is nearing completion – sports a wide assortment of options, from apartments and office space to retail space and an open-air atrium called The Hub.
While mixed-use developments appear to be gaining popularity, they still remain the exception, not the rule. For one, they work best in urban areas, said Alan Nevin, director of research at Xpera Group.
“You can’t have one in Alpine,” he said. “You basically need a lot of people to feed the retail and hotels and the other parts.”
Money is also an issue. Lenders have been hesitant to bankroll multi-use developments because it can be difficult getting tenants to commit for all uses. Malmuth ran into that problem with I.D.E.A. 1.
“We tried to get more office tenants to prelease so we could do more office space in I.D.E.A. 1, and we just weren’t successful,” he said. “It’s very difficult to put the office piece in mixed-use.”
The concept is hardly revolutionary.
“Mixed-use is not new,” Malmuth said, noting that many older urban buildings have residential units above stores. “Most of the great cities we like to visit are mixed-use. It made sense to take advantage of any building envelope you had.”
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