source: Alastair Wallace / Shutterstock.com
Mixed-use commercial property investments continue to grow in popularity across North America. They are the right option for upward development in highly populated areas and can offer a steadier revenue stream to owners than a single-use investment
Mixed-use buildings are unique in that as an owner you are privy to two very different types of tenants who both bring their own value. However, the interests of residential and commercial tenants vary greatly. This is why the right balance must be struck between creating pleasurable amenities and situations for all tenants in order for the investment to be and remain successfully leased.
Stability and balanced rights
What residential tenants want
Residential tenants are attracted to mixed-use buildings because of their typical proximity to high density communities that offer a high work, life balance. Functionality and shared space of a mixed-use property is very important to a residential tenant. They will not react kindly to their quality of life being affected by a commercial tenants daily workings. For example, if a parking spot has been taken up by a commercial tenants client or delivery truck.
What commercial tenants want
Commercial tenants primary concern will be that their business operations run smoothly without restriction placed on when and how they can use their unit. Commercial tenants will also be concerned with the outer and inner maintenance of the building and the quality of residential tenants. In the leasing contract, commercial tenants will likely want guarantee that residential tenants cannot impose restrictions on their operations.
Things to consider when refurbishing or purchasing a mixed-use property
For a mixed-use investment to be both profitable and successful, it must be attractive, efficiently designed and well maintained. Your property must be able to attract the right type of tenants and then the tenant mix must work seamlessly. The type and quality of residential tenant you are able to attract or that the neighbourhood attracts will directly affect the interest of commercial entities.
Mixed-use buildings are worth the investment if the right balance is struck between residential and commercial tenants. For more on investing in mixed-use properties in Niagara click here.