Mixed-use properties combine residential, office, retail, and recreational spaces under one roof. They offer investors broad risk diversification and align with the trend toward urbanization. Their share of the German commercial real estate market rose from 5 percent (2017) to 11 percent (2018).
This keeps travel distances short and saves resources. For example, the trip home could be combined with a visit to the hair salon, a trip to the gym, or a stop at the supermarket. Mixed-Use Real Estate meet the growing need for a Urban Neighborhood with flexible uses. The term “mixed-use” originally comes from the United States. There, it refers to Mixed-Use Real Estate has long been the standard in urban planning.
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The main types of use form the basis of the Urban Neighborhoods and occupy the largest areas.
Supporting commercial uses usually account for a smaller proportion of the total area. They are needed by the primary users in their daily lives and enhance the attractiveness of the Urban Neighborhoods.
Public-oriented use is aimed at the entire urban population, generates an influx of people, and thus creates a lively atmosphere in the neighborhood.
Because of their different types of use, they offer Mixed-Use Real Estate broad risk diversification. Fluctuations in individual markets do not affect the property as a whole. Downturns in specific market segments are cushioned; there is no risk of a complete loss of rent or vacancy. This ensures a steady cash flow. The success of Mixed-Use Real Estate is not influenced by short-term market trends, which makes it an increasingly popular asset class.
A look at the numbers demonstrates the long-term viability of mixed-use properties: While their share of transaction volume in the commercial real estate market was still around five percent in 2017, it had already risen to eleven percent by 2018. This trend is being reinforced by the COVID-19 pandemic and the associated lockdowns: The HAHN Retail Real Estate Report 2021/2022 notes increased interest in mixed-use properties and forecasts a rise in both demand and supply.
This new land-use category is intended to facilitate high building density and a diversity of land uses in urban areas. Accordingly, it serves to Urban Areas housing, as well as space for commercial businesses and social, cultural, and other institutions. Mixed-Use Real Estate meet these criteria and are suitable for the development of a neighborhood into a Urban Neighborhood.
A characteristic feature of a Urban Neighborhood It’s not just the practical aspect of short distances, but the lifestyle it embodies. “Urban” here stands for cosmopolitanism, tolerance, and freedom. The colorful mix of residential space, recreational areas, and local amenities allows residents to make the most of each offering in their own way. Urban Neighborhoods On the one hand, they offer the freedom to flourish in the anonymity of the big city; on the other hand, they can serve as a place for building identity and a sense of home.
The building blocks of a smart mobility concept are:
Mixed-Use Real Estate and Urban Neighborhoods reflect the spirit of the times and address today's challenges. They contribute to the appeal of downtown areas and, thanks to their versatility, meet a wide range of needs.
For investors, Mixed-Use Real Estate They are attractive because they offer excellent risk diversification and are not dependent on the performance of individual market segments. In recent years, mixed-use projects have steadily increased their market share.
Of central importance to Urban Neighborhoods are smart mobility concepts. Elements of sustainable transportation planning include public transit, long-distance transportation connections, pet-friendly garages, and parking structures, as well as car-sharing models. Even with mixed-use properties, developers must provide demonstrate the availability of commercial parking spaces. That Mixed-Use Real Estate It is not expected that they will completely replace traditional residential and office buildings in the future. Nevertheless, they are establishing themselves in the market as an attractive asset class and offer significant added value for both investors and users.
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What are mixed-use properties?
In Mixed-Use Real Estate Various types of use are located under one roof—for example, retail space, residential units, offices, recreational facilities, and services. Unlike traditional residential or office buildings, Mixed-Use Real Estate They are not limited to a single area of life, but offer space for a variety of usage concepts.This keeps travel distances short and saves resources. For example, the trip home could be combined with a visit to the hair salon, a trip to the gym, or a stop at the supermarket. Mixed-Use Real Estate meet the growing need for a Urban Neighborhood with flexible uses. The term “mixed-use” originally comes from the United States. There, it refers to Mixed-Use Real Estate has long been the standard in urban planning.
Downloadourfree white paper,“Smart Parking for Businesses,” now and learn everything you need to know about the topic.
The main types of use for mixed-use properties are:
- Offices and Coworking Spaces
- Living spaces
- Shopping Centers
- Educational Institutions
- Hotels
The main types of use form the basis of the Urban Neighborhoods and occupy the largest areas.
In addition, there are supporting business models:
- Parking
- Food Retail
- Medical Practices
- Gyms and Wellness Centers
- Dining
- Entertainment (Movies)
- Services (Hair Salon, Tradespeople, Laundromat)
Supporting commercial uses usually account for a smaller proportion of the total area. They are needed by the primary users in their daily lives and enhance the attractiveness of the Urban Neighborhoods.
The mixed-use real estate portfolio is complemented by retail and public-facing uses, such as:
- Green Spaces and Parks
- Playgrounds
- Daycare Centers
- Libraries
Public-oriented use is aimed at the entire urban population, generates an influx of people, and thus creates a lively atmosphere in the neighborhood.
Mixed-Use Real Estate: An Emerging Asset Class
Mixed-Use Real Estate not only improve the quality of life Urban Neighborhoods, but they also offer significant advantages for investors.Because of their different types of use, they offer Mixed-Use Real Estate broad risk diversification. Fluctuations in individual markets do not affect the property as a whole. Downturns in specific market segments are cushioned; there is no risk of a complete loss of rent or vacancy. This ensures a steady cash flow. The success of Mixed-Use Real Estate is not influenced by short-term market trends, which makes it an increasingly popular asset class.
A look at the numbers demonstrates the long-term viability of mixed-use properties: While their share of transaction volume in the commercial real estate market was still around five percent in 2017, it had already risen to eleven percent by 2018. This trend is being reinforced by the COVID-19 pandemic and the associated lockdowns: The HAHN Retail Real Estate Report 2021/2022 notes increased interest in mixed-use properties and forecasts a rise in both demand and supply.
The reasons for the success of mixed-use real estate are:
- Urbanization: Since the Industrial Revolution, more and more people have been living and working in cities. Affordable housing and office space are becoming scarce. In contrast to large housing complexes on the outskirts of cities—which can become socially troubled areas—and office complexes that stand empty at night, mixed-use properties are used around the clock and appeal to a variety of target groups.
- Mobility Patterns: Good inner-city infrastructure and connectivity are important factors for many people. Bringing together housing, work, leisure, and amenities in one place meets the needs of the modern city dweller. Short distances are environmentally friendly and conserve resources.
- Shortage of Building Land: Given the shortage of building land in cities, the single-use of buildings is considered inefficient and no longer fits the concept of the urban neighborhood. Mixed-use properties respond to changing needs and can combine trends from different segments, such as coworking spaces and accessible housing.
To make a mixed-use property competitive, several factors should be taken into account:
- Location: Choosing the right location is crucial to the success of a mixed-use property. It is important that the location is suitable for all of the building’s intended uses.
- Total Investment: The total investment required to purchase a mixed-use property is typically higher than that for a purely residential property. However, the return on investment is also higher.
- Tenant Selection: The appeal of a mixed-use project depends largely on the selection of tenants. Finding the perfect mix of tenants can be a challenge. Leases should be as financially sound and long-term as possible. Nevertheless, it can be worthwhile to bring smaller sociocultural organizations on board as well, as they can help realize the creative potential of the neighborhood concept.
- Asset Management: The diversity of uses means greater coordination efforts are required. Each tenant requires a different approach and level of support. This leads to higher administrative costs.
What is an urban area, and what role do mixed-use properties play in it?
The ongoing trend toward urbanization is leading to a shift in thinking in urban planning: Since 2017, the planning law category “Urban Area“.This new land-use category is intended to facilitate high building density and a diversity of land uses in urban areas. Accordingly, it serves to Urban Areas housing, as well as space for commercial businesses and social, cultural, and other institutions. Mixed-Use Real Estate meet these criteria and are suitable for the development of a neighborhood into a Urban Neighborhood.
A characteristic feature of a Urban Neighborhood It’s not just the practical aspect of short distances, but the lifestyle it embodies. “Urban” here stands for cosmopolitanism, tolerance, and freedom. The colorful mix of residential space, recreational areas, and local amenities allows residents to make the most of each offering in their own way. Urban Neighborhoods On the one hand, they offer the freedom to flourish in the anonymity of the big city; on the other hand, they can serve as a place for building identity and a sense of home.
How is mobility organized in the Urban Quarter?
Urban infrastructure and a smart mobility concept form the foundation for successful mixed-use projects in the Urban Neighborhood. Urban densification means maintaining all essential services and functions as the population grows.The building blocks of a smart mobility concept are:
- Public Transit: For many cities, public transit is the central element of future transportation planning. The expansion of public transit is intended to reduce traffic while simultaneously improving mobility within the urban area .
- Long-distance travel: Proximity to or good access from train stations, bus stations, transportation hubs, and airports ensures the accessibility of the Urban Quarter from outside the area.
- Parking garages and underground parking facilities: Parking areas accommodate parked vehicles and enhance the quality of life in urban neighborhoods. Innovative concepts such as neighborhood parking garages, which are used by residents and visitors alike, serve multiple properties simultaneously. Underground parking garages free up space in urban areas for other uses; above-ground parking garages offer rooftop space for climate-friendly installations such as solar panels and green spaces.
- Sharing-Models: The provision of rental bikes, e-scooters, and car-sharing promotes mobility in urban areas and reduces the number of private vehicles taking up space.
Conclusion: Added Value Through Mixed-Use Development
Mixed-Use Real Estate They bring together a variety of uses in one location. They are primarily used for residential space, office space, commercial space, shopping centers, educational institutions, and hotels. This mix of uses is complemented, for example, by service providers, medical offices, and recreational facilities.Mixed-Use Real Estate and Urban Neighborhoods reflect the spirit of the times and address today's challenges. They contribute to the appeal of downtown areas and, thanks to their versatility, meet a wide range of needs.
For investors, Mixed-Use Real Estate They are attractive because they offer excellent risk diversification and are not dependent on the performance of individual market segments. In recent years, mixed-use projects have steadily increased their market share.
Of central importance to Urban Neighborhoods are smart mobility concepts. Elements of sustainable transportation planning include public transit, long-distance transportation connections, pet-friendly garages, and parking structures, as well as car-sharing models. Even with mixed-use properties, developers must provide demonstrate the availability of commercial parking spaces. That Mixed-Use Real Estate It is not expected that they will completely replace traditional residential and office buildings in the future. Nevertheless, they are establishing themselves in the market as an attractive asset class and offer significant added value for both investors and users.
Would you like to learn more about smart parking? In our Download Center You'll find more information, success stories, and tips there. Get started and stop by!
Would you like to learn more about ParkHere? Then fill out the form and stay up to date on the latest mobility topics.