Thinking about diversifying your real estate portfolio but not sure where to start? It might be time to consider investing in a mixed-use property. What is a mixed-use property, you ask? Great question! Here’s some basic info to get you started on your research.
Put simply – the definition of a mixed-use property is a commercial property used for both residential and commercial purposes. These types of properties are quite common and most notably seen in urban cityscapes. Mixed-use properties come in all varieties and provide a symbiotic relationship for landlords, tenants and patrons.
Advantages of mixed-use properties include:
- Diversification of portfolio and tenants – Owning a mixed-use property can help reduce the risk exposure to investors. The high demand for property space combined with longer leases and multiple tenants create a buffer to protect from lost income if a tenant moves out. A mixed-use property also creates a diverse group of tenants and business owners. The functionality of the building gives people what they want and therefore efficiently addresses the needs of both.
- Convenience and walkability – Mixed-use properties are often in close proximity to neighborhoods and living spaces, making them attractive to both buyers, renters and community members. A survey by the National Association of Realtors showed that 53% of Americans prefer walkable communities. A mixed-use property creates a walkable and convenient community.
- Tenant Quality – The majority of tenants looking to secure the space will be commercial tenants. As business owners, they are more likely to retain cleanliness and property maintenance to attract customers, reducing risk of negligence and complaints.
There are seven types of mixed-use property to consider: Main Street, Live + Work, Compact Office Space with Amenities, Office + Residential, Shopping Mall Conversion, Retail District Retrofit and Mixed-Use Hotels.
CGI’s own 888 Hilgard is an example of a trending mixed-use commercial property – putting a twist on the traditional hotel model. As an extended-stay & student housing option, 888 Hilgard is located across the street from University of California Los Angeles. Local and international students have the freedom and flexibility to stay for a semester or longer while guests of the university are given a short-term option. This also provides flexibility for the investor.
There is much more to learn about mixed-use property investing before you begin but we hope this rundown helps set you in the right direction. Is mixed-use property investing right for you? For more guidance, contact CGI Real Estate Investment Strategies at info@cgistrategies.com.
Resources
