2023 Fall Issue of Urban Land - 44

invest 50 percent or more equity to capitalize
the project is likely required, due to
liquidity constraints. Lenders have taken a
much more conservative perspective on
demand drivers and new supply. As the capital
markets thaw, environmental sustainability
and carbon reduction will present significant
opportunities in terms of engaging with commercial
customers.
BUCKLEW: Financing depends on the project's
size and scale. For example, if the commercial
component on the ground floor is considered
insignificant in the overall building's pro
forma, more emphasis will be placed on the
largest and riskiest component-in most situations,
the office or residential component.
If you're planning a large urban district with
multiple uses and a substantial square footage
for each component, the financial and
asset class risk factors will all be considered
more intricate and challenging.
What are good strategies right now for
balancing the mix of uses?
CARPENTER: I think it boils down to the right
balance of live, work, play-I would include
retail and hospitality under the " play " category.
Every location and submarket is different,
so the right mix changes from project to
project.
CHANG: Successful projects today share some
common traits. They are backed by highly
liquid and financially strong organizations.
For example, our clients-like Federal Realty,
which has historically focused on retail-are
now making investments in mixed-use projects
within their existing developments. Similarly,
public REITs like Boston Properties are
diversifying into residential and hotel develA
professional
beekeeper tends the
hives on the rooftop
deck at Vulcan Real
Estate's Cypress,
a seven-story,
237-unit apartment
community in
Seattle that includes
ground-floor retail.
opments alongside their core focus on office
properties. Bringing office users into a retail
complex attracts more lunch and breakfast
business, while bringing in residents drives
dinnertime and weekend business to the
neighborhood.
HEALEY: A human-centered approach is
crucial to create a great retail experience.
We've noticed significant interest in urban
versions of mini-golf and bowling, virtual
reality gaming, and other experiences that
people can't order online. Coming out of the
pandemic, people have a real thirst to be
together and have fun. We recently introduced
a new retailer called Sandbox VR
into one of our commercial office projects. It
offers a virtual reality experience where you
can immerse yourself in different themes,
such as a fantasy theme, kind of like Game
of Thrones, making it a super fun activity to
enjoy with friends. Food and drink offerings
are also great.
BUCKLEW: Upfront planning is crucial for
successful mixed-use developments. Making
sure that the right stakeholders are involved
from the beginning allows everyone to collaborate
on how to design the spaces and
incorporate the necessary flexibility. This may
involve considering demising walls to accommodate
potential changes in merchandising
or determining how to handle back-of-house
operations like trash, parking, and loading
areas, which significantly impact a building's
operational capability.
How can mixed-use developments support
equity and local businesses?
MYERS: Healey: In the Seattle region, we
have successfully brought in one-of-akind,
single-store entrepreneurs along with
national retailers that were first to enter the
market. This approach creates a special and
authentic retail experience. However, local
businesses often lack the infrastructure and
resources to design, construct, permit, and
build their space, so we provide additional
support. For example, for a project in Seattle's
Central District, which is a historically
Black neighborhood, we sought Black entrepreneurs
for the ground-floor retail spaces.
We created three vanilla boxes, fully finished,
44
URBAN LAND FALL 2023
VUL CAN REAL ES T A TE
2023 Fall Issue of Urban Land

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