Creativity, Challenge Drive Today’s Mixed-Use Property Managers
November 18, 2020
Contraction isn’t the only story in commercial real estate right now, say three mixed-use property managers. Instead, despite a rough year, they’re focused on opportunity, and sharing what’s working in the complex field today (a lot!) and what they’ve learned during the pandemic (also a lot!).
They spoke during an IREM panel discussion called “Mixed-Use Property Management,” held virtually during the virtual REALTORS® Conference & Expo on Tuesday.
For Nancy San Pedro, Equity Residential’s director of California retail in Los Angeles, San Diego, and San Francisco, today’s mixed use is all about creative reuse. “How can we make people feel comfortable being outside?” she asks.
Among the options she’s exploring for her portfolio of spaces include turning the roof level of a little- trafficked parking garage into a Pilates studio or a day care center, which, by law, must have exterior access.
“Why let a tenant go out when I have space we don’t use?” she notes. “It’s a win-win for everyone. The footprint gets larger and the landlord helps tenants stay in business long-term. It’s a lifeline.”
San Pedro’s also considering repurposing ground-level retail into an indoor dog park, seeking dedicated street-level parking for third-party delivery drivers, and creating to-go windows for restaurants.
She points to a San Francisco restaurant that’s figured out a way to stand out at a time when so many are folding. Not only has it dedicated the front of the restaurant just for to-go orders and made use of the sidewalk thanks to city permits, but “they’ve created ‘San Francisco’s living room,’ a space where diners can eat in an outdoor structure that makes them feel like they’re inside.”
All three experts believe mixed use is only going to grow. Consumers are facing a choice between housing that has limited walking access to amenities or a community with the convenience of retail, restaurants, entertainment, and even medical facilities. For developers and property managers, it’s an opportunity to create a vision for a neighborhood.
“Mixed use reflects bonding with the community. It’s a social and economic environment where you know the barista where you buy your coffee or your wine guy,” says General Manager Melissa Kreutner of Endeavor Real Estate in Austin, Texas. “It’s a judgment against single-use zoning and driving for hours. It’s about more responsible and humane development.”
What do aspiring mixed-use property managers need to know?
“The #1 thing is to approach every day with flexibility,“ says San Pedro. “We used to have a static approach to how we did things. We’ve found we’re long-term partners with our tenants [now] in how we interpret the lease and how we help them stay open and thrive.”
Kaci Hancock, operations director for REIS Associates in Houston, says the industry needs “people who can display empathy and be comfortable enforcing a lease. Tenants look at us more like partners than wardens. They know we’re in this together.”
Another factor property managers need to be comfortable with is “technology, technology, technology,” says Hancock. “The pandemic forced us all to get with it, and get with it quickly.” For tenants, Hancock is upgrading bandwidth, moving everything to be contactless, and upgrading building automation systems to better monitor the health of building systems.
In addition, mixed-use management is complex. One development may have multiple associations and sub-associations, which means coordinating who maintains what, who hires the contractors, and who pays for what.
But all three managers say the complexity is both the challenge and reward of the job. “There’s no boredom,” notes Kreutner.