Merits and Demerits of a Mixed-use Development

In the choice of a mixed-use property, either as a developer or a client for leasing or renting space, you should be informed of the merits and demerits of such projects.

Merits and Demerits of a Mixed-use Development

This helps the investor make informed decisions. In this article, therefore, we will cover the advantage as well as the disadvantages of the mixed-use development projects.

Advantages of mixed-use development

1. It allows for infrastructure consolidation as opposed to planning and establishing independent structures. This is evident in;

  • The utilization of a single or just a few sewerage systems
  • A common electric and water service
  • One fire security and site safety site
  • Same parking space
  • A common waste management system

2. There is insulation from economic vitality

There is a diversified revenue source for the property owner or a developer. This assures the property owner of financial stability over a long period of time resulting from the continued lease of the property.

3. There is the consolidation of operations.

When the property owner contracts individuals that are qualified for mixed-use property management, it ends up simplifying the maintenance of the property. The overall management is also simplified in comparison to independent-use structures.

4. Local economic improvement

The increased number of clients sees general growth of local businesses in comparison to the stand-alone structures. New people who are interested in the services offered by the mixed-use development end up increasing people who are potential clients to local businesses. 

5. Increased social connectivity

The reduced need for vehicle travel, mixed-use development tends to hold together a community and promote the need for sharing of resources. This, in the long run, ends up fostering interactions of the community members.

6. A nice location

Most mixed-use developments are situated near existing social amenities such as hospitals and schools. This is important to the mixed-use development clients since they have reduced movement due to the availability of almost all services in the same place.

Disadvantages of mixed-use developments

1. Financing challenge

There is a lot of costs to be met by the property owner to end up having a complete mixed-use development project. The developer, therefore, should have enough capital in reservation for the project before the development commences.

2. Conflict of residential and commercial tenants

This happens when there is poor planning and in instances where the tenants have opposing interests and goals.

It is therefore advisable to consider both the advantages and disadvantages of a mixed-use development project before reaching a conclusion either as a tenant or a developer.

-Edited by Emomeri Maryanne