Developers are increasingly turning to a groundbreaking strategy to breathe new life into struggling commercial malls: integrating residential units into these spaces. This innovative approach not only revitalizes aging properties but also offers numerous advantages for businesses and residents alike.
“One significant benefit of combining residential and commercial properties is the potential for increased foot traffic and customer base,” says Steven Mann, a developer and General Partner at Propertize Ventures. “As residents move in, they become a built-in audience for the shops and services within the mall, providing a steady stream of potential customers that can boost sales and sustain growth for businesses.”
This integration aligns with the concept of walkable communities, where residents have easy access to amenities without relying heavily on cars. This shift in community planning has gained traction, especially in light of the housing crisis, which has left the nation short of millions of homes. Urban planners advocate for adaptive reuse—repurposing existing structures like malls—as it aligns with principles of sound planning, emphasizing proximity to employment centers, amenities, and transportation hubs.
Moreover, integrating residential units introduces a diversification of revenue streams for property owners. “Putting people next to employment centers, commercial amenities, parks and most notably transportation hubs, are a hallmark for sound planning principles; especially for the people-centered communities of tomorrow,” Mann says.
This diversification of revenue streams ensures malls become less vulnerable to fluctuating consumer trends and economic conditions, ensuring long-term financial stability.
Residents also benefit from the convenience of living within a commercial mall complex, with retail outlets, dining options, and entertainment venues just steps away. “The integration of residential units introduces a diversification of revenue streams for property owners,” Mann adds. “With rental income supplementing traditional retail earnings, malls become less reliant on fluctuating consumer trends and economic conditions.”
Despite the potential advantages, some malls have failed to capitalize on the residential angle, leading to financial struggles. For instance, the American Dream Mall in East Rutherford opted against incorporating residential units and has struggled to turn a profit since its opening. However, experts suggest that integrating residential components could have helped such malls navigate economic uncertainties and enhance their financial viability.
Furthermore, adding residential units maximizes existing infrastructure and amenities within malls, reducing costs and environmental impact. This approach creates mixed-use developments that cater to diverse needs and preferences, increasing property value and attractiveness to investors.
Additionally, residential development generates significant property tax revenue, which can fund critical infrastructure projects. As property tax collections from the office sector decline, municipalities can offset this by adding density through residential integration.
From a community-building perspective, the integration of residential units fosters social interaction and a sense of belonging among residents. “Planning at the pedestrian level allows for the creation of walkable communities that capitalize on existing infrastructure and reduce environmental concerns,” Mann explains. He also explained that the greenest buildings are typically the structures that don’t end up in a landfill.
However, navigating zoning and regulatory requirements is crucial when implementing mixed-use developments. Developers must ensure compliance with local ordinances and regulations governing land use and residential construction, collaborating closely with municipal authorities and stakeholders to streamline the development process.
In conclusion, integrating residential units into commercial malls offers numerous benefits for stakeholders, including increased foot traffic, revenue diversification, enhanced shopping experiences, and community building. As developers continue to embrace this innovative approach, mixed-use developments herald a promising future for urban living and commerce.
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