MIXED-USE BUILDING BOOM
The idea that the “ whole is greater than the sum of the parts ” is a simple concept that dates back to the days of Aristotle . These days , it ’ s one of the fundamental drivers behind an explosion of mixed-use development projects .
“ There is definitely more attention and interest in mixed-use than I have seen in my nearly 50 years in the business ,” says Walter Clements , CCIM , president of Clements Realty Advisors in Highland Park , Ill ., and an instructor of a CCIM Institute course on the sector . These developments range from smallscale neighborhood projects to billion-dollar mega-projects that include the likes of Hudson Yards in New York , Orlando ’ s Creative Village , and the Railhead in Frisco , Texas .
Mixed-use is being fueled by a growing appetite for a live-work-play lifestyle . In the wake of the COVID-19 pandemic , people are hungry for interaction and places where they can connect with others . A greater focus on health , wellness , and sustainability is contributing to a desire to live and work in walkable and bikeable communities . Additionally , significant demographic shifts are at play . In the past , families with children drove housing decisions with a focus on the suburbs and good schools . Now , empty nesters and young professionals are more in the driver ’ s seat , and they prefer an urban lifestyle where things are close and convenient . “ There are a lot of dynamics that are all occurring at the same time in our society that are driving demand for these mixed-use projects ,” Clements says .
One major impact of COVID-19 has been growth in mixed-use projects in secondary and tertiary markets , notes Eric J . Davis , CCIM , a principal at Tejas Development in Austin , Texas . People started moving out of downtowns into outer suburbs and rural areas , which brings more development to those markets . For example , Leander is a suburb of Austin that is experiencing a jump in mixeduse assets .
Springline
Mixed-use projects are nothing new to Main Street America . The country has a long history of buildings with street-level retail and either restaurants and apartments or office space on the floors above . “ Today , many of these small towns have the bones or structure already there for mixed-use projects ,” notes Davis . Developers can use the city hall or government center as an anchor and build around it . What you end up with in some of these smaller towns is exactly what developers are trying to create in larger markets , which is town centers , he adds .
Often , mixed-use projects are more complex , and they require a skilled team that can work together from the early stages of analysis through leasing and marketing of the different components . Skilled commercial real estate professionals have an opportunity to bring value to the table for their clients who own , manage , and / or develop mixed-use projects .
CASE STUDY : SPRINGLINE Location : Menlo Park , Calif . Developer : Presidio Bay Ventures
Synopsis : Springline is a 6.5-acre mixed-use development comprised of two 100,000-sf office buildings , 35,000 sf of retail , 183 residential units , and a 900-stall subterranean parking garage . The spaces between the buildings , totaling about 2.5 acres , is programmed as outdoor open space ( both public and private ).
Presidio Bay Ventures is aiming to define a new generation of the built environment with projects such as Springline in Downtown Menlo Park , Calif . The mixed-use project aims to create a user experience that weaves in innovative technology , health and wellness , and sustainability .
“ Springline is a lifestyle and a feeling that we ’ re evoking amongst all of our employers , employees , visitors , and residential tenants ,” says K . Cyrus Sanandaji , CCIM , managing director and founder of Presidio Bay Ventures . The original site was a brownfield that involved a large assemblage of uses including an auto dealership and auto repair .
Although the development was in the works for about six years , Presidio Bay Ventures took it over in early 2020 and reimagined the design . “ We truly believe that this is the future of sustainable and responsible development in California and beyond , especially as you look at the impact traffic and commutes have on communities and cities ,” says Sanandaji .
The Springline campus hosts a variety of events such as movies in the plaza , TED Talks , and art shows . Residences offer smarthome technology with features such as voiceand app-controlled lighting , window shades , and thermostats . The project also has received LEED Gold , WELL , and Energy Star certifications , as well as being certified by the U . S . Resiliency Council .
The project was built in three phases , with the third and final phase — the residential component — completed in June . Retail is 100 percent leased with restaurants , cafés , shops , and a boutique grocery store . Office is about 85 percent pre-leased , and residential has seen strong interest since it started pre-leasing in May . Springline also is located directly across the street from the city ’ s main Caltrain station , which is the primary transit system connecting towns along the peninsula to San Francisco and South Bay . “ If you start creating these clusters where people can live , work , and play … you can start impacting in a meaningful way traffic and emissions issues and encourage people to create community around the places where they work , live , and socialize ,” Sanandaji says .
Presidio Bay ’ s goal is to anticipate the occupants ’ needs and respond accordingly . “ That ’ s how you create a differentiated
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COMMERCIAL INVESTMENT REAL ESTATE MAGAZINE SUMMER 2022