A development that contains two or more integrated land uses is called a mixed-use development.
Among the possible components of a mixed-use project are office uses, retail and entertainment uses, hotels, a resort, and housing (either single-family or multifamily housing). Some projects include office and retail uses; others combine a hotel with retail uses; and still others mix retail and entertainment uses with office space.
Mixed-use projects can be large complexes spread over many acres or buildings that occupy a single block. They can be found in many kinds of locations, including suburbs, inner cities, and resort areas. Some are built from scratch on raw land. Others reuse underutilized land (such as inner-city railyards) and buildings (such as train stations). Some mixed-use projects are structured as public/private partnerships and include public facilities, such as a sports stadium or a convention center. Some are oriented to public transportation facilities like commuter-train stations, subway stops, or intermodal terminals.
Compared with single-use projects, the financing of mixed-use projects is more complicated. The projected rental stream, tenant base, and other performance measures of each component property type must be analyzed. Furthermore, lenders and investors must be able to separate out their collateral. The developers of these projects face the challenge of finding different types of tenants for each use.
Despite the heightened challenges, mixed-use projects offer opportunities for developers and owners to attract a broader; more diversified tenant base and to generate more income than a single-use project could achieve.