RESOURCES
JOHNSON FAIN www.johnsonfain.com - NORTH AMERICAN PROPERTIES www.naproperties.com - GTM ARCHITECTS www.gtmarchitects.com 240-333-2000
the neighborhood. (The exposed look might work well near a historic district or industrial but not in newer urban area, explained Hernandez-Ayala.)
INVESTING OPPORTUNITIES Most mixed-use developments have apartments with strict anti-subletting policies, so you probably won’t be able to purchase a unit in a mixed-use develop- ment as a rental. At the moment, there aren’t very many opportunities to invest in projects like those that GTM Architects and North American Properties handle. If you want to invest in a mixed-use development, your best bet is to partner with someone who has a successful track record. Don’t try to jump in on your own because mixed-use develop- ments can be extremely complicated. “There are a lot more examples of projects that didn’t work than those that did work,” Kelley said. He added that it’s not enough to have extensive residential or commercial ex- perience or separate experience in both. When you put the two together, you face complex challenges, even if the develop- ment is small. For example, if you have restaurants on the ground floor, you have to provide a route for the ventilation through the residential floors. That’s just the beginning. You have
to provide a space for retail loading and unloading, parking for both retail customers and residents and an area for trash collection. Plus, you’ll have to comply with the National Building code, local codes and often LEED codes. Because they can be so complicated, Hernandez-Ayala said, these projects can be three or four years in the making, which means you need to be able to fore- cast what Millennials and Boomers will want that far in advance. It’s a big risk. Not to mention an expensive one. Unless you have a stack of cash to invest,
you’ll need to get a commercial loan, and that could be tricky, especially if yours is a smaller development, because the work involved may not justify the 1 to 2 points of interest commercial loan brokers typically charge. You may be able to get incentives, though, if the local govern- ment is trying to attract development. •
Teresa Bitler is a regular freelance contributor to Think Realty Magazine. Contact her at teresa@teresabitler.com.
14 | think realty magazine july :: august 2016
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