These tumultuous times may be wreaking havoc on your commercial real estate enterprise. Once-loyal tenants may be late with payments and long-standing companies may be going out of business. As the owner of a newly empty shopping center or professional building, you may want to consider converting the space to a mixed-use property.
With market conditions changing rapidly, you need to be creative. However, you still need to be careful as you move forward. Be sure you are getting accurate information and reliable advice before you sign any contracts or finalize any deals. The following factors may influence your development decisions.
Trends
Several regions in the Houston area have welcomed mixed-use projects in the past few years and others are following suit. You may find that planning departments will approve some types of projects more quickly than others. Trends include mixing housing with retail or office space, and creating mini-warehouses or distribution centers.
Legal hurdles
Gaining legal approval and proper permits can be a challenge. You may need amendments to current codes. There may be environmental issues. City government may need to work with developers to make infrastructure improvements or ensure regulatory compliance.
Development costs
Acquiring financing for a project that is out of the ordinary can be difficult. Investors may not understand the benefits of trying something unique, or they may be wary of risks associated with the unknown. Various uses will incur different costs, so do a great deal of research before you begin a mixed-use project. Make as few changes as possible to the existing structure — or, if you make big changes, be certain they will pay off.