Investors’ Guide to Mixed-Use Property for Sale: Understanding the Live-Work-Play Hybrid [2023]
It’s easy to be mixed up about mixed-use property for sale! The sector offers a head-spinning amalgam of residential, commercial, hotel, and retail space; however, each piece harmonizes to form an immediate community. Not to mention that commercial mixed-use properties are especially popular in our hometown of Columbus, Ohio, spread across the urban and suburban landscape.
Are you ready to learn about commercial mixed-use property for sale? First, as a prospective investor interested in the mixed-use real estate development concept, you must understand what is a mixed use property. Also, know the requirements of these unique community environments and the people inhabiting these structures. That’s why our in-depth review of commercial mixed-use buildings and mixed use spaces will provide the insight to make a wise investment decision. Join us as we explore the benefits of investing in mixed-use properties, survey a cross-section of the different types of properties, scrutinize current trends in the market, and discover why mixed-use property for sale is such a good investment.
Let’s start our journey at the beginning and define mixed use property.
What is Mixed-Use Commercial Property?
Mixed-use commercial property is either a building or a land development that includes residential and commercial space. For example, a structure with office space on the ground floor and apartment units on the top floor would be considered mixed-use residential or mixed-use office space. As is familiar with most mixed-use properties, the residential portion takes up more square footage than the commercial share. You’ll often see the property listed as mixed use commercial residential property for sale or . Sometimes the property will be called a multi use commercial building. Others call it a mix use property. For tenants, mixed-use space is commonly referred to as a live-work space.
Mixed-use commercial real estate has also become central to urban development planning. Developers may combine residential, commercial, cultural, institutional, and entertainment functions to create a fully-blended multi-use setting. Or, entities can be disconnected entirely, yet co-exist on the same parcel of land. Commercial real estate development within the mixed-use sector can take up a single building or span an entire city block or neighborhood. Planners can create a theme within a multi use commercial building, in which all residents and business owners share an everyday lifestyle, economic status, or cultural vision. As an area becomes more populated and industrialized, commercial mixed-use property for sale becomes more valuable and creates a more efficient ecosystem among all inhabitants.
When carefully planned and executed well, commercial mixed-use real estate can incorporate various functions that complement each other.
What Are the Different Types of Mixed-Use Spaces?
Mixed-use properties are types of commercial properties that serve two or more purposes. The multi use commercial building typically includes a residential section comprised of at least three units and a commercial section. However, as noted above, some mixed-use buildings include a recreational section or other space. Below are all the various types of spaces usually found in mixed-use buildings for sale:
- Commercial
- Residential
- Retail
- Office
- Industrial
- Hospitality
- Recreational / Entertainment
- Cultural
- Institutional
- Self-Storage
- Parking Lot
Mixed-use property for sale can also be vertically or horizontally structured.
What is the Difference Between Vertical and Horizontal Mixed-Use Properties?
A vertical mixed use building is a single structure that contains multiple types of spaces within. The ground level usually has retail stores or restaurants, with office or residential spaces above. Horizontal mixed use properties comprise single structures within a complex. Each structure within a horizontal mixed use complex often serves a different purpose (e.g., residential structure, office space structure, retail structure).
What Are Some Examples of Commercial Mixed-Use Buildings?
You’ll typically see commercial mixed use buildings designed as residential mixed use office space or retail residential mixed use space; however, there are many other types. Below are some examples of mixed-use property; they are some of the largest and most prominent commercial mixed-use real estate projects in the country:
- Port Covington — Baltimore, Maryland
- The Gulch — Atlanta, Georgia
- Schuylkill Yards — Philadelphia, Pennsylvania
- Water Street Tampa — Tampa, Florida
- River District — Chicago, Illinois
- Riverton — Sayreville, New Jersey
- Lincoln Yards — Chicago, Illinois
- Highpoint on Columbus Commons — Columbus, Ohio
In each commercial mixed-use building example above, developers and investors sought innovative ways to combine urban-style living and close-knit communities where everything is within walking distance. That was the intent and result of our mixed-use development services team when they conceived and completed the Highpoint on Columbus Commons project mentioned above. Today, commercial mixed-used real estate is as popular as ever, attracting investors from around the globe and millennial homebuyers and entrepreneurs looking for startup opportunities.
Why is Mixed-Use Commercial Real Estate Becoming More Popular?
While mixed-use property is not a new concept by any stretch, they have experienced a sharp rise in popularity, particularly in the U.S. Starting in the early 2000s, more cities and their outlying suburban areas have seen an increase in commercial mixed-use space for lease. So, why the steady rise in demand for commercial mixed-use property for sale over the past 20 years? There are 4 main reasons for the mixed-use property craze!
- Great for business. Local businesses thrive on proximity to their client base, so what’s better than sharing a building full of prospective customers? Today’s generation values convenience and will bypass online marketplaces for the brick-and-mortar stores they walk by daily.
- Diversity of tenants. For property owners and property management companies, a mixed-use apartment building can efficiently address the diverse needs of both residents and business owners.
- Convenience steps away. Convenience is a big selling point of commercial mixed-use buildings. According to the National Community and Transportation Preference Survey by the National Association of REALTORS®, 53 percent of Americans prefer walkable communities. Residents and business owners enjoy access to schools, libraries, parks, and other facilities — all within an arm’s reach.
- Less risky investment. Commercial mixed-use real estate investors and developers incur far less risk due to the high demand and diversity of space. A property owner who rents a standalone retail store or building typically risks a substantial decrease in revenue should they lose a tenant. Commercial mixed-use properties offer a buffer because the loss of one tenant minimally impacts revenue. There is even more of a buffer when owning multiple commercial mixed use buildings.
Commercial mixed-use properties are defined by their efficient design, convenient location, wide range of amenities, affordability, and high-quality tenants. These characteristics are the lifeblood of any thriving mixed use commercial property.
7 Common Varieties of Mixed-Use Commercial Property for Sale
Zoning, which are the laws governing how land will be used, has created more opportunities for commercial mixed-use properties. These laws essentially permit commercial properties to exist and sell in otherwise residential areas. We won’t get into the details of how municipalities determine what land use is permitted or prohibited; however, it is evident that local governments are following cultural trends and loosening the separation of residential and commercial developments. The prevailing theory by developers is that residents will enjoy more convenient access to the products and services they use daily.
So, let’s dive into the different forms that commercial mixed use property can take in the real world:
Main Street Residential Commercial
The central to a town’s center may be the oldest mixed-use real estate model in existence. The “Main Street” model stretches back at least two centuries to Victorian-era Great Britain and has almost become a mainstay in American life from the country’s inception. Main Street mixed-use property for sale typically includes two- to three-story buildings with residential units on the top floors and commercial units on the ground floor — all facing the main street, of course!
Live + Work
Small businesses are the lifeblood of communities throughout the US and central to the growth of mixed-use properties. An archetypal “live + work” mixed-use space includes residents living in the same building where they operate their small businesses. Living spaces may be above, behind, or alongside the commercial space. For instance, a photographer or artist’s loft might be a bedroom over a studio. Sometimes, business partners may live adjacent to one another in multiple units above their business on the ground level. Multi-use commercial buildings are especially popular among small business owners.
Compact Office Space with Amenities
The desire to “live where you work” is rising with each subsequent generation entering the workforce. Therefore, the growth of small office units within commercial mixed-use residential communities is unparalleled. These multi-floor commercial structures feature small retail and professional service companies with office floor plans that cater to businesses with a small footprint.
Commercial Mixed Use Office Space + Residential
Not uncommon in major metropolitan areas across the country, a combination of office and residential units is now found in many suburban areas. Commercial mixed-use office space is primarily a commercial structure with multi-residential family units co-existing in the same building.
Shopping Mall Conversion
Online shopping has led to an inevitable decline in shopping malls. For creative developers, repurposing these vacated shopping malls showcases an incredible push toward innovation. As a result, shopping malls now have new life as a mixed use commercial property with residential units included. Throw in some office units and shopping mall conversions to perfectly capture the live-work-play culture in the commercial mixed use building.
Mixed-Use Retail District Retrofit
After years of neglect, decline, and outright abandonment, downtown and suburban retail areas are experiencing a renaissance. Whether you live in a small, medium, or large US city, these areas are seeing a shift from commercial-only to commercial and residential. Highpoint on Columbus Commons is a perfect example of a deteriorating retail space re-energized by a mixed-use residential makeover. Thousands of residents now enjoy Downtown Columbus in a park-like setting with conveniences from neighboring businesses.
Mixed-Use Hotels
One of the latest trends in commercial mixed-use property for sale is within the hotel sector. Hoteliers continue finding innovative ways to attract new clients while enhancing profitability. As such, today’s mixed-use hotels often combine hotel rooms and condos and/or retail space. Some properties even feature some level of office space or co-working facility, thus perfectly showcasing the live-work-play model.
Each new type of mixed-use property offers a fresh and unconventional look at how we use space. While many of these mixed-use property types seem to blend, there’s no doubt that developers will continue to push the boundaries (or maybe reel them in). Buying a mixed use property is a significant investment. Before looking at mix use property for sale, consider the types of spaces you would like the multi use commercial building to contain.
4 Advantages of Investing in Mixed-Use Property for Sale
Mixed-use property for sale is exciting; isn’t it? Just think about all the possibilities of an investment opportunity in mixed-use real estate. Before you pull out your checkbook, discover some of the benefits below.
1. Mixed-Use Properties Are Sustainable Commercial Real Estate Models
As we mentioned before, mixed-use property is not a new concept. Entire societies have been built on this real estate model. Mixed-use properties may be erroneously aligned with other fads that seem to sprout from the Millennial generation; however, mixed-use properties appeal to all generations. The excitement is primarily due to the communal nature of mixed-use commercial real estate.
Still unsure if a commercial mixed-use investment property for sale is a safe bet? Consider this: The mixed-use real estate model ensures the sustainability of brick-and-mortar retail facilities across numerous industries. While e-commerce juggernauts such as eBay, Amazon, and even Walmart have threatened the livelihood of local (and physical) businesses, mixed-use commercial real estate has proven that consumers still want to get out and enjoy a more tangible shopping experience. For example, customers like to try on clothes, visit a hair salon, eat out, go to the dentist, check out home furnishings, and grab a cup of coffee.
The singular challenge for investors in mixed-use property for sale is determining what type of business to include in a mixed use real estate community. What will attract and keep tenants in your mixed-use real estate development? And, just like opening a new business, you must understand the market and uncover the perfect activity to sustain your growth for years.
2. Commercial Mixed-Use Real Estate Developments Attract High-Quality Tenants and Businesses
As it stands, Millennials and empty-nester Baby Boomers are the demographic that is most attracted to mixed-use commercial property development. Why? Millennials and empty nesters:
- enjoy living in urban centers;
- seek affordable rentals which are more manageable than single-family housing;
- appreciate the proximity of shopping, parks, recreation, and entertainment facilities; and
- approve of sustainability and smart, green technology.
3. Live/Work Tenants Will Take Care of Their Rentals/Leases
We all know the potential problems associated with irresponsible and reckless tenants. Live/work tenants, however, are particularly interested in the maintenance and care of the mixed-use property. Tenants who live where they work are generally less problematic with rent payments and property maintenance.
4. Landlords Can Expect Longer Tenant Retention
Tenants can be notorious for breaking leases abruptly — even if it means losing their deposit or not paying the last month’s rent. However, investors who buy mixed-use property for sale experience longer tenant retention.
Due to the high demand for commercial mixed-use real estate developments in major metropolitan markets, tenants often have to go on waiting lists to secure a residential or commercial property. Once they finally get inside a community, they realize quickly that the development often exceeds their expectations.
Therefore, tenants do not want to leave. Walkability, safety, affordability, amenities, and other features make living in a residential and commercial development of this kind too irresistible to leave. Business owners with a high success rate are less likely to give up such prime real estate.
Lastly, multi-use commercial developments often foster a community mindset in which residents and business owners form a tight-knit neighborhood. People who are drawn to a tight community will usually stay in that community regardless of other opportunities that might lie elsewhere.
Are Mixed-Use Properties for Sale a Good Investment?
Mixed-use properties are a good investment because they increase investors’ profitability while diversifying risk.
There are many benefits of investing in mixed-use property for sale. Having different types of spaces in one property offers convenience for tenants. A mix of commercial, residential, and retail uses reduces the need for tenants to travel. A mixed use residential property often evokes a greater sense of community for the tenants as well. Commercial mixed use buildings for sale allow commercial real estate investors greater returns with lower risk. There is usually a high demand for commercial mixed-use property, often in sought-after neighborhoods. Buying mixed use property lessens your risk. By diversifying investments across multiple property types, less risk is involved. Even in economic downturns, commercial mixed use real estate properties usually thrive (when built and managed properly). Generally speaking, buying mix use property for sale is among the most ideal commercial property investments.
Current Trends in Mixed-Use Real Estate Property
By their very nature, mixed-use properties for sale allow investors to develop nearly any residential/commercial arrangement within a seemingly limitless scope of ideas. The more conceptual a developer becomes with the model, the more attractive the development becomes in the mixed-use real estate market.
What are some trends that are currently attracting consumers to a mixed-use property for sale? Let’s take a look at some examples, below.
1. Extended-Stay Properties & Student Housing
A trending example of a mixed-use property for sale is the idea of trading in the traditional hotel model for mixed-use hotels such as extended-stay or mini-stay residential complexes. Take, for example, The Fig, a 4.4-acre complex that comprises a hotel, residential college-student housing, and several retail spaces near the University of Southern California.
The extended stay housing was a more attractive setup that allowed investors to fill up the spaces short-term or long-term. A student could stay during the school year, or university guests could book the rooms during a week-long conference. All the amenities made the mixed-use real estate development even more attractive for all occupants and guests.
2. Re-Thinking the City Zone
For mixed-use commercial property development to work, city planners must reconsider zoning laws in specified areas of the town. Zoning regulations were established in most cities to separate residents from industrialization. And, the division ensured the security and safety of residents.
Mixed-use property for sale has morphed zoning laws. Most metro city planners still adhere to strict zoning codes but allow the codes to apply differently in certain areas of town on a case-by-case basis. The determining factor is what a developer brings to the table that can stimulate an area’s economy without endangering a development’s citizens or business owners.
The rezoning trend is taking root in integrating residential units into already established commercial zones and properties. A glaring example is the nationally-recognized Midtown outside of downtown Atlanta. This diverse, culturally-driven district attracts thousands of visitors from all over the world each year. While businesses in Midtown have traditionally thrived, living in the area has always been challenging due to the zoning codes. City planners devised a specific long-term process for developing streetscapes and mixed-use property projects. Midtown even has a special zoning category for such uses within designated geographic areas. Now developers can reconceptualize commercial buildings that were either empty or half-empty by integrating residential units into already established commercial properties. We will continue seeing more mixed use commercial residential property for sale due to rezoning.
3. The ‘Social-Over-Everything’ Lifestyle
Surprisingly, people want to be around others in today’s residential and business world. Gen-Xers and Hipsters may have enjoyed a brief period of isolationism and anti-establishment sentiment; however, Millennials and early Gen-Z’ers prefer community and social interaction. The social-over-everything mentality that dominates the culture has spilled over into work, family, and community.
Developers and investors in mixed-use property for sale are in tune with this cultural shift. And, they have responded by creating work-live-play environments where entire communities build careers, engage with family, and spend quality time together. As conventional, large brick-and-mortar retail businesses crumble, retailers that are succeeding and experiencing exponential growth are offering elements of experience and a place where people gather instead of just shop.
While business behemoths such as Whole Foods Market, Starbucks, and Apple Store have set the template, local businesses benefit from the same format. Mixed-use property developers have created entire multi-property settings based on the cultural trend of social-over-everything.
Why Invest in Mixed-Use Properties in Columbus, Ohio?
The Columbus Region — a flourishing 11-county territory in Central Ohio — is home to 2.1 million residents. Columbus Metro is the fastest-growing metropolitan area in the Midwest. For nearly a decade, the Region has led the Midwest’s largest major urban regions in job expansion, population, and gross domestic product (GDP) growth.
1. Many recognizable brands have been flocking to Columbus.
Columbus is the HQ of some of the world’s most recognizable brands—Scotts, Express, JPMorgan Chase, Nationwide, and Abercrombie & Fitch. Fortune 500 corporations thrive here but are not the only businesses to succeed in our community. Millennials have moved to Columbus, OH by the thousands to launch startups in nearly every industry imaginable. Millennials have become Columbus’s most prolific and entrepreneurial demographic.
2. Columbus is more affordable and has more substantial job growth.
There are several reasons businesses are moving to Columbus: The cost of living in Columbus, Ohio is competitive. The real estate market is affordable — the median sale price of a typical single-family Columbus home is $230,000, with an average price of $184 per square foot. and the cost of living index is 86.4, compared to the national average of 100. Groceries, utilities, transportation, and health costs are affordable in Columbus, compared to the remainder of the U.S.
3. Columbus’s culture and nightlife are also booming.
An endless range of eateries, bars, coffee shops, and other cultural cuisine attracts people of all backgrounds and tastes to Columbus, Ohio. The people engage in all types of activities including music, theater, sports, and activities for singles and families. One such place is the world-famous Columbus Zoo and Aquarium which is nice to visit during any season. Residents can attend sporting events year-round, from the MLB AAA Columbus Clippers to the Columbus Crew SC and the NHL’s Columbus Blue Jackets. Accessibility throughout Columbus has drastically improved due to the current urban development strategies that have emerged over the last ten years. Residents can enjoy dense, walkable neighborhoods and access Care2Go, CoGo Bike Share, Uber, and the COTA public transport system. And don’t forget that Columbus is Ohio’s state capital!
4. Flourishing commercial real estate spans beyond mixed-use property in Columbus, Ohio.
While this article concentrates on mixed-use property for sale, you should not underscore the opportunities that all types of commercial real estate offer. After reading this complete guide on mixed-use properties, you may want to look at our in-depth review of commercial property for sale in Columbus, Ohio. Our region has seen incredible growth over the last decade with proven ROI.
How to Find Mixed Use Properties for Sale
A licensed commercial real estate broker can help you find mixed-use properties for sale that best suit your desired location, requirements, and budget. However, many websites allow you to find a commercial property available based on your criteria. Due to the live-work nature of mixed-use properties, you may find these types of listings on both residential and commercial listing sites. Below are some examples:
- CREXi
- LoopNet
- Zillow
- CityFeet
To Buy or Not To Buy – Turn to Mixed-Use Property Stats in Columbus
Prominent areas of Columbus, Ohio are transforming into mixed-use real estate development communities that meet residents’ needs across all demographics. Developers are renovating existing commercial buildings and erecting new structures downtown and along the suburbs.
In doing so, designers fill gaps in various markets where mixed-use properties can stimulate the economy. These properties occupy shared amenity spaces on multiple levels of the structures. To assess the strength of the mixed-use property sector, it is essential to assess the current numbers. Investors looking to develop or purchase mixed-use commercial property in Columbus, Ohio should know the following statistics, which paint a clearer market picture.
- There are 299 commercial mixed-use properties in Columbus, Ohio.
- The average assessed value of commercial mixed-use property in Columbus is $517,712.
- Columbus mixed-use properties for sale have sold at an average price of $3,453,933.
- The average lot size of mixed-use properties in Columbus is 219,554 square feet.
- The median lot size of mixed-use properties in Columbus is 7,100 square feet.
- There are an average of 18 units in each commercial mixed-use building.
- The aggregate units in Columbus mixed-use properties are 11,864.
- In Columbus, the aggregate lot acreage is 1,456.
- There are 863 Columbus mixed use property industrial mortgages.
(Note: The aforementioned stats were recorded last year; we will update this section once updated data is available.)
Tenant Retention is the ROI for Buying Mixed-Use Property for Sale
As with any commercial property, achieving ROI on buying a mixed-use property for sale requires identifying the right investment opportunities, practicing due diligence, and learning to live with a degree of risk. So how do mixed-use properties differ from other types of commercial properties?
The critical component to maximizing your ROI in mixed-use property is tenant retention — among both residents and business owners. You must create an environment where people want to live, shop, work, and spend time together. Therefore, your design concept must foster and stimulate tenant interaction and not discourage it. Tenant interaction leads to tenant retention, which leads to a higher ROI. After all, if your property suffers from vacancies, you’ll have difficulty generating and maintaining a healthy cash flow.
One of the ways you can contribute to tenant retention is to promote local startups. These new businesses may present an inherent risk but also fuel a sense of community that mixed-use properties are built upon. Support startups such as coffee shops, novelty restaurants and delis, service-driven businesses, entertainment venues, grocers, small consumer-driven tech businesses, salons, and spas in these red-hot markets.
How to Value Mixed Use Property
Are you wondering if an asking price of a mixed-use building for sale is reasonable? Or do you want to know how to price a mixed-use property you’ll be selling? A mixed-use property appraisal is the most accurate method to learn the property’s value. Appraising mixed use real estate is essentially no different than appraising other commercial properties. However, there may not be enough mixed-use buildings on the market to use as comparables. In this instance, the commercial appraiser will utilize other methods and tools to perform the mixed use property valuation.
Get Mixed-Up With Commercial Mixed-Use Property For Sale
If you have made it to the end of this article, congratulations! You must be ready to invest in mixed-use property for sale, one of the country’s fastest-growing commercial real estate sectors. As with any significant purchase, it is critical to have a knowledgeable partner by your side. And, as a commercial real estate development and brokerage firm with a stellar 85-year track record in the industry, The Robert Weiler Company offers unrivaled expertise. To say it succinctly, we’ve been there and done that with many mixed-use properties under our belt. If you’re not ready for such a significant investment, we can help you find mixed use property for rent, or other commercial properties for sale or rent.
In addition to commercial brokerage services, we can provide mixed use property appraisals to value a mixed use building you’re buying or selling. We can also help you manage your new mixed use building with our property management services.
The Robert Weiler Company partners with commercial real estate investors who have an appetite for building communities, not just structures. As such, we’re prepared to show you how your investment in mixed-use property for sale can shape Columbus, Ohio and Central Ohio. Reach out to us at 614-221-4286.
