Across the nation, traditional lines between where we live, work, and play are being redefined, giving cities and developers a new opportunity: mixed-use commercial real estate. In its best application, the approach integrates residential, retail, entertainment, office and even event space within a single, usually walkable, location.
Mixed-use development offers a dynamic solution to the varied challenges of modern living, allowing people to lead full lives in the same location or close geographic area. Incorporating elements of smart design, sustainability, and connectivity to create environments that are engaging, functional and practical, modern mixed-use developments can bring together community, commerce, culture and entertainment into one centralized location.
This renaissance isn’t just taking place in the big cities but smaller urban areas, such as Leawood, Kansas, home of KBS’ Park Place Village, and also KBS’ Park Central Apartments in downtown Raleigh, North Carolina, where you’ll find luxury high-rise living with curated amenities. Both properties provide office, retail, and residential space that includes upscale shops, restaurants, and cafes.
Park Place Village includes 10 buildings that boast a broad mix of tenants and amenities. The surrounding area features the Aloft Hotel, 201 apartments, 30 townhouses, 27 lofts, one-of-a-kind shopping experiences, parking garages. Numerous events are held at the property’s outdoor community courtyard — a place where Kansas City residents gather for events throughout the year for summer concert series, movies in the square, a Farmers’ Market, KC Restaurant Week, ice skating, and more.
KBS’ Park Central apartments were developed from the ground up with Kane Realty. The property has 286 luxury residential apartment units and 34,226 square feet of ground-floor retail space with a location at the center of North Hills, a community with more than 40 restaurants and 80 retailers, banks, pharmacies, salons, a 24/7 grocery store, a fitness center, and a movie theater. One of the best perks of living in Park Central is being next door to the beautiful green space of Midtown Park, a fantastic gathering spot and venue for concerts and other events meant to build community and create memorable experiences for residents and visitors alike.
Mixed-use properties have evolved over the years to meet the changing needs and desires of those wanting to live in a more urban setting. The surges of these concepts often coincide with high-growth phases but can also occur during significant cultural shifts — such as those experienced throughout the pandemic and its aftermath. What once may have been combinations of residential and commercial or studio spaces — a storefront or gallery with living quarters in the back, for instance — have transformed into vibrant, multifaceted communities that can be as large as a mall or a high-rise apartment building.
According to the NAIOP, the Commercial Real Estate Development Association, multiple trends have converged to create opportunities for developers to create a new future of retail environments.
“The first is the rise of online retail, which continues to significantly disrupt physical retail spaces, especially those serving middle-market communities. Additionally, there is skyrocketing demand for mixed-use spaces in which people can reside, work, and find recreational and entertainment options nearby.” The result is an exponential increase in the number of apartments completed annually in “live-work-play” developments.
Offering a multitude of benefits — from convenience and accessibility to enhanced quality of life — mixed-use developments bring together diverse functions in close proximity, reducing the need for long commutes and fostering a greater sense of community.
According to jpmorgan.com, “Convenience is king in commercial real estate.” Consumers have grown accustom to convenience on demand. This includes smart buildings that automatically adjust utility usage, offer keyless entry, and remember your preferences, as well as same-day e-commerce delivery. The article reiterates that while mixed-use concepts aren’t new, combining two or more asset classes into one building or development has surged in recent years.
What are the services most preferred with mixed-use? According to JP Morgan, retail and self-care services are essential. You want some form of grocery, drug store, coffee house, urgent care, gym, yoga, beauty, and spa services, even if it’s as basic as a hair and nail salon. Because office workers often run errands to and from work or on breaks, having a retail outlet where workers can eat lunch and shop for everyday items is also highly advisable.
Technology is also essential to a mixed-use environment. The integration of smart technologies and the Internet of Things (IoT) play crucial roles in optimizing functionality. These technologies, from automated energy-management systems to intelligent transportation solutions, enhance efficiency and convenience for residents and businesses alike.
Connectivity can drive more refined development as systems inherently collect real-time data and analytics, gathering patterns and preferences of users to gain valuable insights. By leveraging this data, developers can make informed decisions to improve the design and operation of these spaces, ultimately enhancing the overall user experience.
Commercial operators, such as KBS, have prioritized the integration of smart-environment innovations into mixed-use developments. By analyzing their design principles, technological innovations, and social dynamics, strategies can be uncovered for achieving the development’s broader goals.
One of the greatest benefits is creating a community environment where there’s social interaction and engagement among residents and visitors. This makes these living situations highly desirable for young professionals new to an area, young families, and even retirees looking for close connections while still having access to cultural hubs without having to drive. By bringing together people from diverse backgrounds and interests, these developments create opportunities for socialization, collaboration, and shared experience, enriching the fabric of life.
Public spaces, entertainment venues, and cultural activities play a vital role in shaping the identity of districts featuring mixed-use development. From bustling street markets to outdoor performance spaces, these amenities contribute to the vibrancy and vitality of the communities, attracting residents and visitors alike.
Flexibility is essential in the design of mixed-use buildings, allowing for easy adaptation to changing needs and trends over time. Sustainable design practices are increasingly becoming a hallmark of mixed-use developments. These practices address climate change and enhance livability while setting new standards for environmental responsibility, from energy-efficient building materials and rainwater harvesting systems to green roofs, such as the one atop KBS’ 1000 Continental in King of Prussia, Pennsylvania, which is also home to a buzzing bee apiary (beehive) that gives back to nature while delighting and contributing to the well-being of tenants.
The path to creating mixed-use developments, however, isn’t always a favorable one. They’re often paved with a range of roadblocks, including local statutes and zoning rules, infrastructure limitations and public service provision, the preservation of historical landmarks and, of course, sufficient financing.
As our cities continue to evolve and grow, mixed-use commercial real estate will play an increasingly important role in shaping them to be more vibrant, inclusive, and resilient for generations to come.
Learn more at KBS.com/Insights.
