Across the country, the traditional boundaries of where we live, work and play are being redefined, creating a new opportunity for cities and developers: mixed-use commercial real estate. The optimal application of this approach is to combine housing, retail, entertainment, offices and even event space in a single location, usually within walking distance of each other.
Mixed-use developments offer dynamic solutions to the challenges of modern life, enabling people to live fulfilling lives in the same place or in close geographical areas. Incorporating elements of smart design, sustainability and connectivity to create attractive, functional and practical environments, modern mixed-use developments can bring together community, commerce, culture and entertainment in one centralized location.
This renaissance is happening not only in big cities but also in smaller urban areas such as Leawood, Kansas, home to KBS's Park Place Village, and KBS's Park Central Apartments in downtown Raleigh, North Carolina, where luxury high-rise residences with select amenities can be found. Both properties offer office, retail and residential space including upscale shops, restaurants and cafes.
Park Place Village features 10 buildings boasting a variety of tenants and amenities, including an Aloft Hotel, 201 apartments, 30 townhouses, 27 lofts, unique shopping experiences and parking. The property's outdoor community courtyard hosts numerous events and is a year-round gathering place for Kansas City residents, including a summer concert series, movies on the square, farmers' markets, KC Restaurant Week and ice skating.
Park Central Apartments by KBS was developed from the ground up in partnership with Kane Realty. The property features 286 luxury residential apartments and 34,226 square feet of ground floor retail space and is located in the heart of North Hills, a community with over 40 restaurants, 80+ retail stores, a bank, pharmacy, salon, 24-hour grocery store, fitness center and movie theater. One of the best parts of living in Park Central is being next to the beautiful green space of Midtown Park, which serves as a great gathering place, hosting concerts and other events to build community and create a memorable experience for residents and visitors alike.
Mixed-use properties have evolved over the years to meet the changing needs and desires of people wanting to live in a more urban environment. The proliferation of these concepts often coincides with periods of rapid growth, but can also occur during times of great cultural change, such as the one experienced during the pandemic and its aftermath. What were once a combination of residential and commercial or studio space (for example, a storefront or gallery with a residential area in the back) have transformed into vibrant, multifaceted communities that can be as large as a shopping mall or high-rise apartment building.
According to the National Association of Industrial Real Estate Developers (NAIOP), multiple trends are converging, creating opportunities for developers to create a new future for the retail environment.
“First, there is the rise of online retail, which continues to cause major disruption to brick-and-mortar retail space, especially those serving mid-market communities. Additionally, there has been a surge in demand for mixed-use space where people can live, work and find recreational and entertainment options nearby.” As a result, we've seen an exponential increase in the number of apartments completed each year in 'live-work-play' developments.
Offering a range of benefits from convenience and accessibility to improved quality of life, mixed-use developments bring together a variety of functions in close proximity, reducing the need for long commutes and fostering a greater sense of community.
According to jpmorgan.com, “convenience is key in commercial real estate.” Consumers have become accustomed to on-demand convenience, including smart buildings that automatically adjust utility usage, offer keyless entry and remember user preferences, as well as same-day e-commerce delivery. The article reiterates that while the concept of mixed-use is not new, the combination of two or more asset classes into one building or development has boomed in recent years.
What services are most preferred in a complex? According to JP Morgan, retail and self-care services are essential. Even basic services like hair and nail salons are necessary, along with some kind of service, such as a grocery store, drug store, coffee house, urgent care, gym, yoga, beauty and spa services. Because office workers often run errands on the way to and from work and during their breaks, having retail outlets where employees can eat lunch and buy daily necessities is also highly desirable.
Technology is also essential in mixed-use environments. The integration of smart technology and the Internet of Things (IoT) plays a key role in optimizing their functionality. From automated energy management systems to intelligent transportation solutions, these technologies increase efficiency and convenience for residents and businesses alike.
Connectivity allows the system to inherently gather real-time data and analytics, gleaning user patterns and preferences to gain valuable insights and drive more sophisticated development. Leveraging this data, developers can make informed decisions to improve the design and operation of these spaces, ultimately improving the overall user experience.
Commercial operators such as KBS have made it a priority to integrate smart environmental innovations into their mixed-use developments. Analysis of design principles, technological innovations and social dynamics can illuminate strategies for achieving the development's broader goals.
One of the biggest benefits is that they create a community environment that fosters social interaction and engagement among residents and visitors. This makes these living environments highly attractive to young professionals new to the area, young families, and even retirees who want close connections while still being able to access cultural hubs without having to drive. By bringing together people from different backgrounds and interests, these developments create opportunities for socialization, collaboration, and shared experiences, enhancing quality of life.
Public spaces, entertainment venues and cultural activities play a key role in shaping a mixed-use development's identity. From bustling street markets to outdoor performance spaces, these amenities contribute to the vibrancy and vitality of a community, engaging residents and visitors alike.
Flexibility is essential in mixed-use building design, allowing it to easily adapt to changing needs and trends over time. Sustainable design practices are becoming a hallmark of mixed-use developments. These practices, from energy-efficient building materials and rainwater collection systems to green roofs, like the one on the roof of KBS's 1000 Continental in King of Prussia, Pennsylvania, address climate change and improve livability while setting new standards for environmental responsibility. The roof also features a vibrant honeybee apiary (beehive), giving back to nature while contributing to the joy and happiness of occupants.
But the road to mixed-use development isn’t always the smoothest. There are often obstacles in the way, including local ordinances and zoning regulations, limitations on infrastructure and public service delivery, preservation of historic structures, and of course adequate funding.
As our cities continue to evolve and grow, mixed-use commercial real estate will play an increasingly important role in making our cities more vibrant, inclusive and resilient for future generations.
For more information, visit KBS.com/Insights.