You say po-tay-toe, I say puh-tah-toe. In the past few years, as the idea of mixed-use development has gained cachet among investors, developers have thrown around the term pretty loosely. To counter that, a panel of experts at the New York ICSC Dealmaking show this week, tried to once again invest the term with a precise meaning.
Kenneth D. Narva, principal and managing partner at PEG/Park, argued that mixed-use must be vertical and have at least three uses that must be integrated and leverage off of each other. Anything less may be “multi-use,” but falls short of being a true mixed-use project, he argues.
At the same time, each component must be economically viable, said Peter Hannigan, managing director of real estate, PB Capital. Each use must make sense on its own in the market. There needs to be demand for each part independent of the others for a mixed-use project to work. That’s how his company underwrites projects when determining whether or not to finance them.
Hannigan also talked about evaluating market conditions in determining whether to go rental or condo with residential units.
Emerick J. Corsi, executive vice president at Forest City Commercial Development, which has developed urban mixed-use centers in Texas and Southern California, says condos don’t work in mixed-use projects outside of New York City. “We will not build condos over retail, we feel that is the wrong way to go,” says Corsi. “It would have to be rentals.”
Christopher E. Pine, president of real estate for Whole Foods Market, added a time dimension to the definition of mixed-use: Unlike the lifestyle centers that can be deserted in the afternoon during midweek, true mixed-use centers, he says, generate traffic everyday from 8 a.m. to 11 p.m.
“A public place that creates vitality and traffic is essential,” Pine says, “We would be the first floor there.”
-- Riccardo Davis