In the past mixed-use developments have lost their charm because of the retail meltdown. There are several retail companies that went bankrupt because of the increase in online shopping.
However mixed-use development gained popularity and now someone asks whether it is a good investment or not. Surely it is. Investing in the mixed-use development is a smart investment for so many reasons. Still, there are a few challenges about which everyone should be aware.
Potential Challenged for Mixed-Use Developments
There are so many factors that make mixed-use development the best investment but don’t forget about the drawbacks, as there are few.
Quite Complex Development
It isn’t easy to build a mixed-use development, as it’s quite complex. The developers have to make sure everything goes perfectly fine and they meet the regulatory requirements for both residential and commercial investors.
The developers prefer to recruit staff who have experience in managing both kinds of properties. Otherwise, they work with two managers who collaborate with each other well.
Whether the developer is building mixed-use development from the scratch or being rehabbed, both ways construction can be a dangerous business. Every year a lot of workers get injured. So, the developers have to ensure they offer practices that are safe for everyone at the time of construction or even when renovating.
Why is Mixed-Use Development the Best to Invest?
There are several reasons but you will learn some major facts that will surely help in finalizing the decision.
Commercial Establishments Never Die
The retail retrenchment doesn’t mean the sky is about to fall. Keep in mind that not all the tenants of mixed-use developments are retail tenants. Several are included in commercial tenants like businesses that hire employees, hotels, and even warehouses. S, it’s possible to manage these developments, without having retail stores as tenants.
However, if you like to have retail tenants, there is no need to worry much. Several do business in a retail establishment. The best part about mixed-use development like times square mall is that residents don’t have to go far in order to shop. They prefer to buy clothes and other necessary stuff from the shops nearby. It becomes easy for the residents to go out at night, in order to have coffee or for some other purpose.
Here there is no need to underestimate online shopping, as its trend is increasing. But if developers find new ways to attract people, they can run a good business.
Good Return of Investment
Everyone likes to invest in a property, from where they are able to generate a great return of investment. One of the key benefits of commercial properties is that you can charge more rent. As compared to residential properties the commercial rent is a bit high.
Attract Desirable Market Segments
People like to invest in mixed-use developments as they appeal to the chief value, environmental sustainability. The majority of this development is downtown, making them perfect for both residence and offices.
The millennials don’t have to use some sort of transport or walk a lot in order to reach the workplace. They can use bicycles. They are able to enjoy city life without wandering all around.
Now the good thing is that older resident like mixed developments too. The senior citizens who don’t live with their children, prefer to have a place that is small, easy to manage, and near shops.
Multiple Advantages of Commercial Tenants
Commercial tenants are best to have as they take great interest in making sure property is well-maintained. When the place is attractive it appeals to the public. Even though residential tenants take care of the property too, however, there is always stress involved for the dealers, in case they end up with a problematic bunch.
Moreover, commercial leases are quite flexible as compared to residential leases. Also, commercial tenants commonly sign much longer contracts. Lastly, for repairing and maintenance, commercial tenants prefer to solve everything during business hours. But residential tenants can call for repairs any time of the day.
So, if you are planning to invest and like to diversify the portfolio at the same time, there is no better option than mixed-use development. You were able to enjoy high returns on investment as mentioned before and so on.