store-aisle

What’s the Use? Mixing up mixed-use developments

1833 770 POTLOC INSIGHTS

Harmoniously assembling commercial, residential and entertainment elements in a given space is a meticulous balancing act and can leave realtors scratching their heads. William Logar, Vice President of Development Sett Capital, commented at the Canadian Apartment Investment Conference that “it is critical to have the right mix of uses—how they come together and how they fit—you must make sure the uses commingle effectively.”

 

Incorporating retail functionalities in a mixed-use development has become the status quo. In 2014, when discussing the successful Marine Gateway venture in Vancouver, BC, Andrew Grant, PCI Developments President said:

we are fussy in that the mixed-use development needs to have a retail anchor, including a grocery store, an eleven-screen cinema, and several large tenants.

According to Grant, the key to a successful mixed-use project is ensuring a strong retail component. In 2017, Marine Gateway located on the Sky Train route in South Vancouver won the prestigious Urban Land Institute (ULI) 2017-2018 Global Award for Excellence. But despite his extensive experience and PCI Developments’ 34-year track record, he regrets that the project could have been larger, as PCI was not aware of locals’ craving for a formidable local retail platform.

The Mixed-Retail Rulebook

Joseph Wilber, SVP of Investments for Gables Residential told the Commercial Real Estate Show that mixed-use developments are “a strange animal, and very different from standalone apartment complexes.” Thanks to realtor insight and experience across projects, however, it is possible to infer clear rubric: “You can take a good retail location and attach residential; you cannot do the

opposite. You cannot take a good residential location and put retail in it and expect that to work.” Shoehorning retail demand into an area that will not have adequate footfall or the lack of parking space are obvious snares that developers fall into, and although the issue of parking sounds small in an era where automobile alternatives like Uber® and Bixi® proliferate, Wilber affirms, “it is still a must.”

Read more :  Are Malls Turning into Disneyland for Adults?

 

Along with trying to gauge consumers’ preferences when assembling a harmonious mixed development, developers encounter numerous stumbling blocks. From rogue columns jutting out into the middle of a retail floor space to support the skyscraper, to tessellating entrances and loading bays to guarantee both internal access as well as street-front pathways (particularly pertinent in severe-weather cities such as Montreal and Toronto), to stifling sounds emanating from loud commerce like gyms and restaurants—there is a lot to handle—and misfiring the perfect mixed-development mixture is understandable.

Understanding the consumer

To build successful mixed-use developments, realtors rely on a combination of experience and expertise, in-depth market research and intuition. Realtors seldom tap into local intelligence, thereby neglecting potential residents’ preferences and requests. North Americans are acutely aware of trends such as ‘Deadmalls,’ the ‘Retail Armageddon,’ and the drop in so-called ‘in-between’ retailers (brands that are neither luxury nor market dominant). Lesser known is the unexpected statistic that retail year on year is indeed up by 3%. Retail trends are compounded by the rise in spending on experiences: over 13% of shopping mall real estate now has nothing to do with shopping—instead of focusing on ‘experiential shopping.’

 

Bridging the gap between realtors and retailers’ understanding of consumer behaviour is therefore critical, particularly as millennials’ purchasing power increases and they enter the market looking to buy or rent in mixed-use projects. Bruce Winder, a retail analyst expert, notes : “Millennials will also ignore stores that don’t cater to the experiences they want,” and Drew Jones, financial consultant for Lloyds group echoes his comments: “they (millennials) definitely favour experiences over material goods and services.”

Read more :  How To Deliver A Great Customer Experience On A Consistent Basis

Recipes for Mixed-Use Development Success

Hot on the heels of Timeout Market Lisbon’s success (in 2017 over 3.6 million people indulged at one of the bars, restaurants, cafes and culinary experiences on offer) the Timeout Montreal intends to rejuvenate Eaton Square, linking up La Complexe des Ailes in the process to create a vast retail and entertainment unit. Corporate office and startup workers across the area, including well-known companies WeWork and JP Morgan, as well as the nearby KPMG skyscraper, stand to benefit.

 

Observing the mixed-use development jigsaw through a gastronomic lens is certainly one way to create a dynamic space and offer an enriching experience particularly for millennials. As Kehoe, an Ambassador for the New York-based International Council of Shopping Centres points out; there is “lots of room for truly mixed-use projects offering food. It increases dwell time — You’re going to stick around to eat.”

 

Ultimately, realtors must develop a deeper understanding of consumers’ tastes, drawing information from more than experience, expertise and retail know-how in estimating what neighbourhoods need. Enabling greater proximity with customers mitigates the risk of mixed-development spaces being added to the growing list of dead malls, and improves social cohesion. A successful mixed-use development creates a wholesome environment for dwellers and chance-visitors alike, by providing for local needs intelligently in a broader context.