Magazine article Journal of Property Management

Mixed Bag: Construction of Mixed-Use Properties Creates Challenges for Managers Juggling Diverse Tenants' Needs

Magazine article Journal of Property Management

Mixed Bag: Construction of Mixed-Use Properties Creates Challenges for Managers Juggling Diverse Tenants' Needs

Article excerpt

The $1.6 billion Time Warner Center at New York's Columbus Circle is a Rubik's Cube of multiple uses. The 750-foot, twin-towered complex houses Time Warner's global headquarters, the Mandarin Oriental luxury hotel, retail spaces, restaurants, offices, luxury apartments, CNN Live broadcast production studios and a concert hall.

"Running a building like this is like conducting an orchestra: You have to make sure all the parts are in harmony," said David Froelke senior vice president and retail general manager for the Related Companies, the project's developer. "We're always checking one use against the other to make sure what one does, does not interfere with the other."

Getting all the different components of a mixed-use development to work well together involves an inherent contradiction: Developers must provide common areas and features that unite and engage a property's diverse tenant mix without allowing tenants to encroach on one another's private spaces.

"The key is knowing what you're going to build, understanding the synergy of all the uses and their needs, and then building to that," Froelke said.

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A developer's mastery at building a mixed-use project impacts a property manager's mastery at managing the project. Even though property managers typically step into mixed-use developments long after the last nail is driven, their success accommodating different tenants and communities under one roof depends largely on how the developments are designed and built.

"If all the right systems are in place," Froelke said, "all you have to do is enhance the experience and the synergy occurring within the building."

MIXED USE--UPS AND DOWNS

Planning and building a mixed-use project from the ground up is not easy considering the myriad design issues at hand. Security needs, electric and other utility loads, parking requirements, maintenance, plumbing, fire protection and even the way a development is framed during construction varies for retailers, residences, offices and other tenants.

"You have to plan in advance," Froelke said. "You have to put the right components in at the beginning because it's almost impossible to retrofit later on." Changing one space often snowballs into changing all the other spaces in a development, which gets pricey and can interfere with building operations, he said.

Vertical mixed-use developments, where multi-purposed tenants are under one roof instead of separated among different buildings as they are in horizontal mixed-use projects, are especially difficult to construct with the goal of minimizing tenants' impact on one another, said Eric Brock, a principal and director for the housing and mixed use studio division of Atlanta-based Lord, Aeck & Sargent Architecture firm.

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"As you bring these different users with different requirements into closer and closer proximity, you have more potential problems and challenges in terms of design, construction and management," Brock said.

Because different uses are stacked on top of one another, certain technical systems, like plumbing, run up and down and bridge between users. Too often, inexperienced developers stack residential units directly above retailers without first designing an "interstitial" space where plumbing and electrical wires can be tucked between the two units, said Ray Peloquin, vice president at RTKL, an architectural firm in Baltimore.

In addition, even though different tenants and residents rely on technical systems like HVAC or water heaters to varying degrees, tenants and residents often share these systems. Should a retailer do something to negatively affect the ventilation system, its space would not be the only one affected. Residents who would likely be less demanding on the system would also be affected.

Charlotte Strain, CPM and senior director of retail for Avalon Bay, said separating as many systems as possible is helpful. …

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