Why the stakes are high in mixed-use property management

Although not a new concept, mixed-use properties are making a splash as of late— trading as their own asset class and treating residents, workers and shoppers to an elevated way of living. A recent boom of mixed-use mega projects has aimed to meet heightened consumer expectations. But as the projects get more complex in their offering and span multiple public and private uses, many investors wonder how to make those different asset classes seamlessly co-exist.

A single-source property management solution backed by a scalable experience management program is the key to successfully activating and operating these expensive projects that have so much at stake.

The case for mixed-use development

A cursory look into the state of today’s office and debt markets reveals why owners, developers and investors are seeking ways to mitigate risk and hedge against inflation. Now more than ever it is critical to squeeze the highest and best value out of any new development or existing asset. Investors are showing interest in the overall attractive underwriting fundamentals that mixed-use assets can offer, punctuated by diversified revenue mix, heightened leasing velocity and greater rent growth when compared to single-use counterparts.

“We are seeing leasing activity in mixed-use assets nearly recovered to pre-pandemic levels, while the overall office market continues to face considerably more challenges,” said Sean McNamara, Director of National Accounts at JLL.

Getting these projects financed and built is a challenge. Developers may consider partnering with additional LP investors, including high-net-worth individuals, institutional players, sovereign wealth funds and pension funds or forming public-private partnerships.

Once the project is financed, assembling the land, overcoming political and community opposition and providing an adequate parking ratio are just a few of the hurdles to overcome. Then, once it’s built, sophisticated property management must deliver an elevated, seamless experience across every corner of the property.

The smart, single-source solution

A single-source solution can usher a mixed-use development through its entire lifecycle, from site selection and land acquisition to construction project management to pre-leasing, marketing and branding. But it’s the day-today property management function that really brings the vision to life, as it’s no small feat to make the experience at a self-contained microcity feel consistent and authentic.

As mixed-use developments skew larger and become more complex in their amenity offerings, the likelihood of the different uses clashing is likely. Having one property management firm break down the asset class barriers and oversee all critical operations from finance and budgeting to client service experience, communication, technology and public event programming will help support the property’s brand essence, increase foot traffic and build tenant and resident loyalty. But first, an outdated property management model needs to evolve along with the demands of visitors asking for a more customized and hospitable experience.

Experience-driven property management

The goal of modern-day property management at large mixed-used developments is to provide and elevated experience backed by five-star hotel-level customer service. Experience management services folded into a property management offering bring energy—drawing people in and giving them a reason to return. Successful experience management offers a one-stop-shop for tenant engagement and entertainment, concierge services, food and beverage solutions, tenant experience technology, wellness, amenity management and so much more.

According to Tyler Kethcart, Director of Experience Management at JLL, “We often see clients building out amazing amenities in their facilities, without a real plan around how to activate and operate them. The market has gone from a flight to quality to a flight to experience, so the most sought-after assets are the ones providing that complete experience.”

Experience management can’t be delivered effectively without the right people. Cues from high-end hotels permeate the atmosphere of a prosperous mixed-use development. Presenting across the entire property a staff with hospitality experience is the best chance at elevating the customer experience. Even office buildings, which traditionally followed a less customer service-focused playbook, are shifting to the hospitality model.

The Plaza Coral Gables: A blueprint for successful mixed-use development

The Plaza Coral Gables is a massive 2.1 million-square-foot development in Miami that stands as a modern-day example of how to successfully imagine, build and manage a property of this size and scale. The property encompasses two office towers, 161,000 square feet of retail space, a 2,200-space parking garage, shared common areas, residential luxury units and low-rise townhomes.

The Plaza Coral Gables has turned a misused infill location into a daily destination for thousands of people. It’s also an extraordinary undertaking from a management perspective, and owner Agave Holdings, LLC has put its trust in JLL as a single source management solution.

McNamara added, “Single-source delivery breeds efficiencies, which breeds higher revenues. There are a number of reasons why an investor would opt for this model instead of a chunky, bifurcated or siloed model. Ultimately, it supports the service ethos you are trying to create.”

A look ahead: bigger and better

The management of a mixed-use asset is so much more than a discussion of ROI. It’s about what delivers the ROI—anticipating community needs, providing impeccable customer service and elevating a place into a place to be. Expectations will only continue to rise, but a property management solution that allows asset classes to seamlessly co-exist, backed by a scalable experience management program, will ensure that these massive assets are positioned for growth and longevity. Well-managed mixed-use developments represent a win-win for both investors and cities, creating more housing, community connection, operating income, retail and tax revenue.

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