Portions of the real estate industry have come roaring back in the last several months, but for the office and retail sectors, the path to recovery has not been simple.
But new reports show that these two suffering real estate participants have concluded that mixed-use may help prop one another up.
“Before the pandemic, retail within urban office areas served as an easily accessible amenity to office employees—perfect for running errands and grabbing lunch with coworkers or a client—however, with physical office occupancy still well below the pre-pandemic baseline, urban retail locations continue to miss out on an important revenue stream,” said Peter Ferramosca, a consultant with CoStar Group.
Embracing a “live-work-play environment” can alleviate the impact that low occupancy has on both office and retail spaces. With less people commuting to the office, surrounding retailers are seeing less foot traffic.
According to CommercialEdge’s most recent national office report, mixed-use developments could help address the needs of all suffering from this dip, including consumers, landlords, tenants, and workers.
However, the question remains whether the adoption of more hybrid and remote work policies could hinder the potential of these developments.
The report cites two specific successful mixed-use approaches: high rises in major business districts and downtown areas, and horizontal developments in smaller cities and suburban areas.