Mixed-use developments are becoming more attractive to real estate investors as they offer many benefits to both investors and tenants. Mixed-use development can be described as real estate property that combines residential, commercial, and sometimes even industrial uses into one structure.
A great example of this would be a building that includes residential units, a restaurant open to the public, a co-working area, a gym and an event space. Mixed-use developments such as these have become increasingly popular for a number of reasons. Tenants have the opportunity to enjoy a space that offers many different amenities in their immediate vicinity. In addition, most tenants, especially young starters, are drawn to the sense of community they feel when living in such a development.
For investors, mixed-use developments are attractive due to the generation of multiple income streams which allows for better risk management and higher returns. In a building such as the one mentioned previously, residential units will be let out, the restaurant will receive customers from the public and the existing tenants, and co-working and gym memberships will be sold to the public and to tenants in the building. Investors have the opportunity to get more creative with ways of generating additional cash flow.
Secondly, the demand for such a development is high which often results in tenants having to be added to a waiting list. Investors feel more confident about the residential units being occupied.
Another great aspect of mixed-use developments is the impact that it has on the environment. There are, of course, many factors to review in order to assess the overall impact a building has on the environment but one prime example would be that the need for commuting can be significantly reduced due to important amenities being just minutes away by foot.
Mixed-used developments certainly come with its own set of challenges such as the additional time needed to ensure regulations are properly met as well as managing noise levels created by the commercial spaces.
Overall, mixed-used developments offer an exciting investment opportunity and we can look forward to discovering many interesting mixed-use concepts.