What comes to mind when you think of mixed-use spaces? For people with a more old-fashioned take on real estate, “mixed use” might be synonymous with undesirable city blocks, small apartments, or cramped commercial quarters. That couldn’t be further from the truth though!
Since about 2018, mixed use development has been experiencing a boom. In neighborhoods both urban and suburban, prospective tenants are interacting with the world differently than we’ve ever seen before. This has become especially true in 2020, as the Covid-19 pandemic further catalyzed the already-existing move towards remote work and a more compact lifestyle.
No one can say for certain how the pandemic and social distancing will shape our society in a long-term sense. However, as much of the market continues to shift and waver, it’s possible that mixed-use development will only become increasingly more popular.
Why Mixed-Use Development Might Be Worth Your Investment in 2020
Pre-coronavirus, our world was already growing smaller in many ways: More compact, more easily navigable, and more accessible. While suburban properties have been traditionally sought after by Baby Boomer and Gen X families, Millennials (even those with children) seem more likely to desire a more urban, more connected lifestyle. Whereas living in the midst of commercial properties might have once been deemed undesirable, Millennial and up-and-coming Gen Z renters are more likely to see walkability and proximity to shops, restaurants, and bars as a substantial benefit.
Especially in the face of continued social distancing, this more compact lifestyle is likely to become increasingly desirable. It’s likely that the need to stay somewhat close to home will continue to play into our lives for longer than we’ve yet to realize, and that means that young families will be excited about properties that connect them to their communities and minimize the need for length commutes or public transportation.
Why Are Mixed-Use Spaces Considered Desirable?
The reasons why mixed-use spaces are becoming more and more desirable really come down to the aforementioned shift in what’s seen as the “idea lifestyle” in the U.S. Where families may once have valued expansive lawns and being away from the hubbub of the city, younger families are becoming increasingly concerned with things like:
- Sustainability & Economics: Shorter commutes into the city lead to a lower carbon footprint and less money spent on gas and vehicle maintenance.
- Convenience: Shorter commutes also mean less time spent in traffic or on public transportation, which may mean less exposure to pathogens, improved mental health, and increased personal time.
- Community & Ethical Consumerism: Younger families frequently want to be engaged in their communities rather than set apart from them. The idea of living near shops and restaurants is attractive because it makes it easier to shop local, work remotely, support small business,etc.
- Simplified Lifestyles: Many up-and-coming renters are less likely to desire huge spaces that require lots of cleaning and maintenance.
Should You Invest in Mixed Use Development?
While there’s no guaranteed “right” answer to this question, evidence suggests that mixed use space may help real estate investors to engage with their market during this season of market turbulence. Popularity of mixed-use spaces only seems to be climbing, particularly in areas with a younger buyer/tenant demographic. Check out trends in your local market for more insight around whether mixed-use space might be a smart investment for you to make in 2020, and get in touch with us here if you have questions about how we can help you finance your investment.