Our research team sees mixed use development, or simply mixed development as a grossly untapped property niche segment for investors. Mix use properties are developments that combine diverse real estate functions within a designated zone – in a road, building, and area, metropolitan, rural, commercial, social, and domestic settings. The basic principle describes the combo of residential, commercial, office, home entertainment, institutions, and government services in the exact same location. There is integration in regards to land use, brings about economic, environmental, social and and cultural benefits.
Benefits of investing in mixed developments
The principle of mixed use real estate could possibly be traced to the start of the commercial transformation, which forced government zoning laws. Integrated development is unique in various ways. It facilitates urban planner’s long term vision to create self-sufficient satellite towns outside of the downtown business district.
It has a great benefit to the local economy as it facilitates community member’s access to their workplaces, especially those people who are considered low wage earners in the community. Different people use the various venues in the community at the same time for various purposes. This benefits local services and shops within the area enormously.
It binds the people together and creates a socially diverse community each time. Facilities are available to everybody, whether rich or poor, old or young. It could enhance the level of interaction among the people living in that community.
It also enhances both the safety and security of people in the community. Less violence is often used in mixed use development community and this is because of improved surveillance; almost everybody is on the street at different times even night and day. It makes to be alert and more conscious of things happening around their community.
Challenges of investing in mixed use development
Despite the huge benefits associated with mix use developments, there are a few challenges are associated with it. There are instances in some countries where the policy is restricted to some areas of the country. This could be a problem because discriminatory policies will not lead to boosting the real estate market.
Sometimes it may cost enormous money to construct mix use development projects.
Reselling condos constructed with an escalating cost reduces the profits to be derived from such projects. The changes in the economy cause sales rescission; this does not augur well for the mixed use development project. Nothing that would affect revenues or reduce the price of properties beyond the cost of building will go well with the policy.
The real estate cycle is always affected by fluctuations and instability. Once there is a downturn in the real estate cycle, it would affect the mixed use development. This is because there is likely to be minus prime default in lower level projects. Developers of mixed use development project should have a plan in place to tackle the problem of inconsistency in the real estate cycle.
Furthermore, some legal issues could impede mixed use development in some parts of the world. Developers have to consider some legal issues like titles, voting strata councils, ventilation, air spacing, usage, access, staff facilities, and several other factors before engaging in mixed use developments.
One big challenge confronting mix use development is the issue of financing and cost.
The recent economic recess is not helping mix use development in some parts of the world. The financing such project is becoming a challenge, as mortgage rate may be higher in some countries and lending process tedious in others. This is not encouraging to the developers because the profits they make from sales do not give enough encouragement. You must work out how best to finance your projects.
Battling for the appropriate location to establish the project is always another challenge developer’s face. Sometimes, the areas to be developed may be a used military ground. Sometimes, sites chosen for such location may not be viable and this would hinder its sale after its construction.
Planning is very important in mixed use development. The project should be planned in a way it would serve the interest of those people who intend to benefit from it. Sometimes planning where to build important facilities could be a challenge.
Conflicts should be anticipated and ways of solving such problems should be put in place if mixed use development is to be successful. Developers have to be creative in designing, achieving a tighter site, and getting the community involved in the project. The project will always be successful once it is exciting. Most successful mix use development requires a savvy developer who knows how to deliver what the people actually want. Mix use development remains the future for the world, especially countries facing land shortages.