Property Management for Mixed-Use Developments

Recently, there has been an influx of popularity in mixed-use developments. Their ability to support non-vehicular access is what makes these sorts of developments a hit, especially among young adults. Mixed-use developments are often referred to as live, work, and play developments because they provide residential, lifestyle necessities, and even entertainment. 

While these developments can be a dream come true for residents who choose to live in them, providing walkability and in some cases fostering a much heightened, and trendy aspect of community, in this post, we will focus on the investor’s perspective and how property management for mixed-use developments can make or break the success of the investment.

Managing such diverse properties comes with a unique set of challenges for property managers. Unique challenges, of course, do not mean impossible, it simply means there's a need for a unique approach curated to help overcome these challenges effectively.

What are Mixed-Use Developments?

Before we can explore how to manage mixed-use developments effectively, it's necessary to clearly define what they are. A mixed-use development is the combination of residential living with either commercial office suites, retail establishments including restaurants, or a blend of all of the above.

The Benefits and Challenges of Mixed-Use Property Management

Aside from the walkability that most mixed-use developments present, there are additional reasons why investors would find mixed-use developments as high value. Interestingly enough, those reasons converge with the benefits of having a sound property management team spearheading such multi-layered assets.

Benefits

Diversified Income Stream And Potential For Higher Return

Considering that mixed-use developments are a blend of different types of real estate, it means that the income being generated is considered separate streams. Think of it as having a house and each room has an individual business being run inside. At the end of the month, you must go to each door and collect a bag of revenue labeled for that particular room. Same concept, except the rooms are business suites.

For example, if an investor owns a mixed-use development that includes a few residential units, a restaurant, and a few office suites. The income from the restaurant will not mingle with that of the apartment units or that of the office suites. But, the value of each will be considered in the overall bottom line of the development.

Considering the multiple business entities, there is the potential for a higher overall return.

Long-Term Appreciation Value

When considering a mixed-use development, it's important to consider the types of real estate that are being combined. Well planned, and well-managed developments will appreciate overtime as they will continue to attract patrons and high-valued residents.

Favorable Zoning And Government Support

Mixed-use developments that are in prime locations can find themselves on the receiving end of much more considering that they are located in areas where the local government may see them as anchor businesses, consequently more significant. Anchor businesses are considered the pillars of the community and are often looked upon as significant. This will apply as well in areas where developments are being repurposed, as it will directly contribute to the revitalization of the given area.

A few potential challenges include

Increased Maintenance Cost

As an investor, budgeting maintenance for a single-family home, or smaller multifamily community can be much more predictable and manageable for investors. When factoring in a larger mixed-use development, it's important to not only consider the residential maintenance concerns but also the additional property types. As well, it's important to consider the staff for each entity and how that will fare budget-wise.

Tenant Mix And Turnover

Adding in the additional real estate types will also mean an expanded rent roll, consisting of residential residents, commercial and retail, or whatever the real estate type may be. 

Parking and traffic management

Organizing traffic for the different types of real estate could present a challenge, particularly if the parking needs of the residents from the different types of real estate collide. 

Overall, the benefits and challenges of investing in a mixed-use development tie hand in hand with effective management. Proper management will enable businesses that garner such attention and support to continue in the manner in which they were initially established and continue to become better.

Strategies for Effective Mixed-Use Property Management

Now that we understand the benefits and even the types of challenges that may be associated with investing in a mixed-use development, let's touch base on why a property management company can make all the difference in successfully investing in a mixed-use development or concluding that your investment was ill-strategized.

Partnering with a property management team that specializes in handling mixed-use developments will help protect and elevate the asset through:

Thorough Tenant Selection: Implementing and following through on the necessary protocols for tenant screening are significant to selecting a cohesive mix of tenants that can help decrease the turnover rate and support the market rent demands.

Facilities and Amenity Management: Mixed-use developments mean multi-types of real estate, multiple common spaces, and a variation of amenities. Regardless of the area in which the given areas are, they must be managed to the satisfaction of all residents.

Communication and Collaboration: An organized property management team will be conducive to what may be considered the lifeblood of a successful mixed-use asset- communication and collaboration. Considering the multiple moving parts, having a fixed communication point will help investors tie in all aspects of the development for a more concise way of communicating and receiving consistent updates.

Security and Access Control: A multi-structural development comes with multiple asset points that will undoubtedly require advanced security measures.  

Do You Already Have, Or Are You Looking To Add A Mixed-Use Development To Your Portfolio?

The renewed popularity of mixed-use developments helps contribute to their investment value, and equally important, partnering with an experienced property management team will help investors meet the challenges head-on, optimize the opportunities presented from the benefits and implement a strategy designed to protect and grow the investment.

Are you looking to add a mixed-use development, revitalized or new construction, to your portfolio? Or, maybe you have a similar asset in your portfolio that can benefit from a renewed, strategic approach? Either way, National Real Estate management group can help you unlock the full potential of your mixed-used development and help see the difference in your real estate investment business.

Connect with us and learn how we can help you enhance and expand your portfolio.