The demand for certain real estate developments is influenced by a combination of cultural and societal impacts including demographic shifts, emerging technology, and financial conditions. Of late, the volatile economic climate has impacted the construction industry with high interest rates, unstable demand, high cost of materials, and a labor shortage. To combat these challenges, construction and real estate development firms must confront the current economic cycle and develop new strategies to address the current effects on their businesses.

As firms decide how to shift their strategy, they should seek new opportunities that diversify their portfolio. Mixed-use developments utilizing podium-type construction are a smart investment as they are a proven concept, continue to rise in popularity, and offer long-term stability. When compared to a single purpose property, the integration of residential and commercial properties presents unique challenges, but also offers rewarding benefits, including diversified revenue streams, maximized land use, and increased property value. Town and City planning departments are more apt to welcome these types of developments that meet even more needs of a community. To mitigate potential changes, firms should work with a single vendor (i.e., a professional land surveying firm) to support the entire life cycle of a podium construction project from planning and design to construction support to as-built documentation.

The concept of podium construction initially flourished decades ago. Prior to World War II, mixed-use developments were proven effective in creating communities and diversifying income streams for both residents and businesses. Post-WWII, easier access to automobiles and more affordable housing developments drove a shift to suburban living. However, since the 1990s, there’s been a resurgence in multi-use properties due to growing populations, congested roads, competitive jobs, working from home (WFH), and the convenience of urban living.

Mixed-use rental communities that offer residential, office, and retail space have quadrupled over the past decade. The battle to build vertical mixed-use properties peaked during the COVID-19 pandemic; 43,700 live-work units were completed in 2021, compared to 10,000 a decade prior. With a focus on ground-floor accessibility and engagement, these communities are redefining city living by offering a wide range of amenities on the same block. Today, mixed-use developments remain in demand as WFH and/or hybrid work continues to be the norm and, as a result, has decreased the demand for commercial high-rise buildings.

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Baby Boomers and Millennials—the two largest generations of Americans—have shown a significant demand for the walkability, flexibility, activity, and authenticity of mixed-use developments. Census data confirmed that zip codes with mixed-use buildings are home to high shares of Millennials, who account for an average of 40% of the area’s population. As many Baby Boomers desire to down-size and with family ‘not-as-present’, they’re at a stage where they still want to be part of a community and have the ease of shopping or getting a coffee nearby; mixed-use developments are a perfect fit.  Plus, people today are healthier and living longer and welcome this type of living to stave off the senior living scenarios.

Building new high-rise developments in urban settings is becoming more complicated due to congestion and rising costs. In major cities like Manhattan, Washington D.C., and Chicago, there’s minimal space for high-rise projects. The demand for office space in cities remains below pre-pandemic levels, and is expected to be 13% lower in 2030 than it was in 2019. As firms run out of high-rise options, podium construction is an attractive, marketable option that can be built on compact sites and benefit developers, residents, and communities.

For real estate developers and investors, investing in mixed-use developments is low risk. These communities create diverse income streams, spreading any monetary risk over several markets—residential, commercial, and retail. Developers can charge different rents and have different leases, creating revenue from multiple sources in the same building, which helps offset construction costs.

The walkability of mixed-use developments reduces the demand for parking. Many of the new mixed-use buildings, either platform construction or podium-type construction, are being built near public transportation, allowing developers to save costs by forgoing parking spaces and garages on the property. And as younger generations are not as interested in owning a car, more mixed-used developments are allocating space for bicycle parking and racks instead. The reduction in parking lends to less funds for developers, including design, approval, and construction costs. Plus, there’s less to maintain—such as repairs, snow removal, and oil/water separation tanks. For most of these buildings, little to no parking means traffic will not be an issue—which benefits both residents and everyone else in the surrounding area.

Mixed-use buildings can improve the quality of life for consumers. These communities offer residents convenience, more time with family, improved health, and flexible working. When residents work from home, they can grab a coffee, run errands, or go to the gym without interrupting their day. As most mixed-use buildings are relatively new and modern, younger residents, who are not interested in the beauty and architecture of older buildings, don’t have to spend time on the weekends updating or maintaining their homes.

Before getting underway with a podium construction project, there are a few barriers to overcome as the codes and regulations differ for residential and commercial properties, mainly with respect to fire resistivity and egress requirements. However, the right partner will have experience with both residential and commercial laws and can provide insight and advice during planning and before design and development.

As leaders in surveying, civil engineering, and construction support, DGT is the one-stop shop for firms developing mixed-use properties. From existing condition surveys to site planning and construction support to as-built plans after construction, DGT is a single vendor that covers all the bases. Instead of juggling multiple vendors throughout the project, DGT supports the project from start to finish. With a single vendor, you reduce the number of parties involved, therefore streaming communication and consistency in design, quality, and overall vision. Consolidating services also leads to cost savings, risk mitigation, and an enhanced commitment to deliver the project on time and according to specified quality standards.

Over the past few years, for example, DGT supported a Boston-based firm in developing a mixed-use residential rental building in Jamaica Plain consisting of 45 rental units with 2,000 square feet of ground-floor retail and 24 surface parking spaces. DGT was involved from the beginning, helping with the planning, designing, permitting process, and layout surveys for the construction of the mixed-use property. For another project, DGT provided construction support surveys for a podium apartment in Brookline, including setting out column grid control, establishing project benchmarks, laying out floor control, and as-built surveys. The pet-friendly apartment community features convenient amenities like a fitness center, valet dry cleaning, and garage parking.

With DGT as your partner, the development of a mixed-use property can be a straightforward process, and a smart investment to grow your portfolio.

To learn more about DGT’s service offerings visit our website: dgtassociates.com