Commercial And Rental Real Estate: Are Mixed-Use Spaces Good For Your Business?

In many urban areas, mixed-use rental spaces are an open secret. And it’s not a surprise to realize that someone probably lives above your favorite cafe. The mixed-use property model combines commercial, retail, or residential ventures in one building, increasing the chances that all the building’s spaces are fully occupied.

With the steady rise in mixed-use real estate, developers are considering ways to design buildings that greatly benefit the owner and tenants. So, if you’re an investor, it’s the best time to get into the mixed-use bonanza since it’s a low-risk investment with high demand. And if you want to take advantage of it, get good points here on converting your existing property to a mixed-use venture.

Read along to understand the types of mixed-use properties and whether it’s the best investment trend for you.

What’s Mixed-Use Property?

A mixed-use real estate investment is a property designed to integrate recreation, retail, commercial, office, and residential functions. For example, you may have a two-story building with the first and second floors reserved for retail and office spaces, respectively. Such properties may range from a single building to a whole neighborhood developed in a unique environment. Moreover, the different structures can be designed to complement each other’s functions.

Living in a mixed-use setting is best for your lifestyle if you’re a fan of living, working, and playing in one place. Because mixed-use properties often involve public infrastructures and outdoor spaces such as sidewalks and corridors separating one building from the other. Therefore, it allows you to shop or report to work using public transit, bikes, or simply walking.

In this model, different structures can perfectly coexist or disconnect according to your needs as a real estate investor. Moreover, as the population around your property increases, the resale value increases, eventually making it a profitable investment.

Types of Mixed-Use Real Estate

Mixed-use commercial and rental spaces can be an amalgamation of several entities. But local regulations have a significant impact on your choice of infrastructure. Therefore, as a real estate investor, it would be helpful to conduct thorough research on the local legislation on real estate; it will save you from unnecessary frustrations. Here are the different types of mixed-use properties:

• Live-Work Model

At the center of the mixed-use real estate boom is significant cultural change where people want to live-work-play in one place. In this model, you can own a business or workspace below, above, alongside, or behind where you live. For instance, you may own a barber shop with an apartment above.

• Classic Main Street

Classic main street residences have existed for eons. They often contain ground-floor business spaces with two to five floors of residential rooms above. Living in such buildings enables you to conveniently access services due to their proximity to restaurants and stores. The proximity allows you to walk or ride a bike instead of using your car.

• Office Space

The COVID-19 pandemic made many people adapt to working from home. Even though the pandemic is behind us, many corporations still maintain the work-from-home model. As a result, corporations require smaller office spaces that mixed-use properties can offer.

• Redesigned Spaces

Online shopping has caused a significant decline in brick-and-mortar stores. As a result, major suburban retail centers and shopping malls have closed. However, wise investors have taken advantage of the situation to redesign abandoned spaces. For instance, some investors have converted old malls into ideal mixed-use apartments and office spaces.

Why Mixed-Use Spaces Are Good For Your Business

Mixed-use properties have several advantages that conventional single-use buildings don’t offer. They are essential for the growth of your business since they provide competitive affordability, convenient locations, and a wide range of amenities for tenants. Here are some of the advantages of owning a mixed-use real estate property:

• Better Property Management

You’re likely to get better property management if you own a mixed-use property compared to single-use buildings. That is because the developers who maintain the units are responsible for an entire community. Therefore, they are careful to maintain exemplary standards that can attract new tenants and retain the existing ones. As a result, your investment will maintain steady profits.

• Brand Appeal

Communities living in mixed-use properties offer enterprises an unrivaled chance to reinforce their brand image. If a particular mixed-use property represents your values as an investor, you stand a better chance of growing your brand if you rent space there.

• Lower turnover

Tenants in residential spaces are likely to leave anytime. Conversely, commercial tenants can stay longer and retain and maintain their rooms since they must maintain a positive public image for the business to thrive.

• Higher Rent

If you own a mixed-use property, you’re likely to charge higher rent because of the amenities your tenants could enjoy. Higher rent increases your profit margins as an investor.

Conclusion

As a commercial and rental real estate investor, owning mixed-use properties can significantly benefit your business venture. Whether it’s a live-work model, a classic main street, or a redesigned abandoned space, you can still reap good returns depending on your strategy. Mixed-use properties have higher rent and lower turnover and may also help you improve your brand. In short, they are the future of the real estate business.