Mixed-use commercial real estate is a versatile and lucrative investment opportunity that provides investors with the chance to develop a property used for both commercial and residential purposes. This real estate approach offers a unique opportunity to blend the convenience of commercial spaces with the comfort of residential living, creating vibrant and dynamic communities.
However, developing and leasing mixed-use CRE can be a complex process that requires careful planning, research, and execution. By understanding the key considerations and implementing a well-rounded approach, investors can unlock the immense potential and financial rewards that come with this versatile real estate investment strategy.
How To Develop and Lease Mixed-Use CRE
Here are a few steps you can follow to help build a successful mixed-use CRE plan:
Step 1: Conduct a Market Analysis
Before developing a mixed-use commercial real estate property, it’s crucial to conduct a market analysis to determine the demand for such a property in the area. This should include an assessment of the local real estate market, demographics, economic conditions, and zoning regulations. The market analysis will provide valuable insights into the potential demand for the property, the rental rates that can be charged, and the amenities that will be most attractive to tenants.
Step 2: Develop a Business Plan
Once the market analysis is complete, the next step is to develop a comprehensive business plan for the property. The business plan should outline the scope of the project, the expected costs and revenue, the marketing and leasing strategy, and the timeline for completion. Also include a detailed financial analysis, including cash flow projections and return on investment (ROI) calculations.
Step 3: Hire a Development Team
A successful mixed-use commercial real estate development requires a team of professionals with expertise in various areas, including architecture, construction, zoning regulations, and property management. Investors should assemble a team who can oversee the project from start to finish, ensuring it is completed on time, within budget, and to the highest standards. You may even consider working with a full-service real estate firm to aid with the overall process and specific steps.
Step 4: Design and Construction
Once the development team is in place, the next step is to design and construct the property. The design should be based on the market analysis and the business plan, incorporating the amenities that will be most attractive to tenants. During the design and construction phase, it’s also important to adhere to local zoning regulations to ensure that the property is in compliance.
Step 5: Leasing and Property Management
Once the construction is complete, then comes leasing the commercial and residential units. The leasing strategy should also use the market analysis and the business plan as resources, targeting the tenants that are most likely to be attracted to the property. Property management is also an essential part of the process, ensuring that the property is well-maintained and tenants are satisfied with the amenities and services provided.
Developing and leasing mixed-use commercial real estate is a complex yet potentially rewarding opportunity for investors. While the process may initially seem daunting, it’s important to remember there are experienced professionals available to provide guidance and support in navigating the intricacies of new CRE business ventures.
Plaza Companies is the Premier Choice of Commercial Real Estate
Plaza Companies is a full-service real estate firm specializing in the leasing, management, construction, and development of some of the most innovative commercial real estate projects in Arizona. Our firm specializes in staying connected and conscientious of all emerging trends in commercial real estate. Contact us today to learn more about leasing the right space or anything else we offer!