A Mixed-Use Real Estate Approach: What It Is and What It Means for the Future of Self-Storage Development

A mixed-use development in Eastpoint, Michigan, anchored by Extra Space Storage

Mixed-use development is gaining popularity, with an increasing number of real estate builders, investors and owners embracing this option to transform large parcels into dynamic, multi-functional spaces that cater to various community needs. This type of project blends multiple land uses—commercial, cultural, institutional and residential—on a single property. The various components are connected in design and function, often including pedestrian walkways.

In urban areas, mixed-use tends to feature dense, multi-story developments combining residential units with retail and services for residents. In suburban areas, they usually span large tracts of land, incorporating single- or multi-family housing alongside retail and business spaces for community use.

The mixed-use concept can be applied to a building, a city block or an entire neighborhood. While these projects are typically built by private developers, they may involve quasi-governmental agencies or public-private partnerships. They frequently feature new construction, however, it’s also common to repurpose existing buildings or brownfield sites.

A self-storage facility can make a strong component of a mixed-use development, making a nice complement to other real estate types. This approach not only opens opportunities in prime locations, it can allow a developer or owner to capitalize on excess land or convince a hesitant municipality to approve a project. Let’s look more closely at this potential and sometimes surprising synergy.

Pros and Cons of a Mixed-Use Approach

There are several reasons why we’re seeing an increase in mixed-use developments today. One is convenience. By combining retail, offices and services at a single location, it’s easier for consumers to shop and do business. When residences are added, it makes it possible for people to live, work and play at places that are within walking distance of each other.

Another reason is efficiency. Maximizing land use creates a more economical infrastructure and makes it possible to plan the entire development at once instead of building in separate phases.

A mixed-use development can help create a unique and easily recognizable neighborhood. To ensure a cohesive look, developers can set rules that buildings, outdoor spaces and landscaping follow a similar design style. This gives the area a unified, memorable character and helps maintain its value.

Cities are also big supporters of these large-scale projects for the reasons mentioned above. As a result, they often make it easier to get approval for opportunities like building self-storage facilities outside the industrial zones where they’re typically confined.

While mixed-use developments improve community infrastructure and urban life, the time and capital required to get them off the ground can be significant. These projects are also more complex. You’ll likely need a larger team for architecture and engineering and perhaps a bigger group of investors to fund the effort. Finally, while a mixed-use investment can offer a strong return, it may take several years to see it, due to the length of the design and construction phase.

Mixed-Use Feasibility

You might be wondering at this point what commercial real estate uses would pair well with self-storage. In fact, storage works well with almost anything, including retail, restaurants, office buildings and hotels. I’ve even seen it partnered with schools and daycare centers. The location will play a big role in deciding what makes sense.

If you’re thinking about subdividing a parcel to include self-storage and other real estate uses, seek expert guidance. Don’t try to go it alone, and don’t rely solely on an architect or engineer for market advice, as they aren’t real estate specialists. Instead, hire a knowledgeable development consultant with experience in mixed-use projects. They can:

Help you understand market needs and what would provide the most economic benefit
Guide you and your design team in creating the right real estate mix and lot sizes
Collaborate with your architect and civil engineer to design the site including grading, utilities, drainage and access points

You’ll also want to commission a market study for the self-storage component of your mixed-use project. One of the first steps is to determine how much land should be set aside, so you can figure out how much space remains for other uses. Often, traffic studies are also required and will be handled separately by a civil-engineering firm.

Mixed-Use Design Considerations

Laying out a mixed-use development is challenging because each site is unique and comes with different constraints and opportunities. However, there are a few general guidelines to keep in mind.

Self-storage can often be placed at the back of a parcel or another less-desirable area that isn’t suitable for another use. It doesn’t need to occupy prime, street-front real estate. A multi-story facility will enjoy good visibility no matter where it goes. If a single-story facility is preferred, consider reserving a small portion of street frontage just for the management office. If you’re building a strip center, consider using one of the tenant spaces as the office.

Your architect can help create a cohesive architectural style for the entire development, including the self-storage component. This will be included in the design code or deed restrictions.

There are many factors to consider with a mixed-use development, but hopefully, this article has sparked your interest and encouraged you to pursue it. It’s the wave of the future for those with large parcels that can be subdivided to include self-storage with other real estate types. Though these projects require much more upfront capital and can take several years to manifest, one that is well-planned and executed can yield significant returns, both financially and by making a long-lasting, positive contribution to the community.

David Baca is an architect and principal of Baca, a Sherman, Texas-based design firm. Over the past 15 years, he’s designed self-storage facilities ranging from rural, traditional, drive-up to more complex and architecturally sophisticated multi-story properties in urban settings. For more information, call 903.893.5800 or email [email protected].

About the Author

David Baca

Principal, Baca

See more from David Baca

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