Factors to consider in mixed use developments

In a number of our posts, we have highlighted how the commercial real estate industry has shown signs of optimism, both in the construction of new facilities and the creation of mixed use facilities that incorporate retail, office and residential living spaces.

Given this prospective, it would seem that any new mixed use project would be successful, but that simply is not the case. Indeed, developers and investors alike must consider several factors before moving forward with a proposed development. This post will highlight a few of them.

Consider the retailer – The type of retailer is important in considering the development. The location must be conducive to the retailer needs and what residents expect in the retailer. For example, it residents expect a Starbucks to be close to where they live, but not necessarily a Sam’s Club.

What type of traffic is expected – When the location is conducive to foot traffic, as opposed to vehicular traffic, smaller, boutique like retailers should be considered as tenants. Conversely, when customers will primarily be coming by car, a larger retailer could be considered.

The type of community – The retailers included in a development must reflect the overall spending habits and culture of the community the retailers will serve. Essentially the retailers must be unique enough to offer a distinguishable shopping experience, but popular enough to attract a large clientele.

Even in light of these factors, having the guidance of an experienced real estate attorney to create language within various agreements to protect your legal interests is critical to the success of such a project.

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