Is this a good time to buy mixed use?

[the dingo]

Does anybody have thoughts on mixed use. I currently am a partner in a B class commercial building, and it has done really well over the last 10 years. I wish I had bought 10 of them. I am thinking about buying a smaller building with the buisness on the bottom and a two or three bedroom flat on the top. What about this type of investment. Let’s assume all of the due diligence has been done in respect to location, lease cost, etc. Question: Is this a good time to buy mixed use ?

[Bugs]

My advice is to stay away from them. Mixed use projects are appealing to the planners and environmentalists who want to build high density communities. However, the realities are that mixing disparate uses ultimately detracts from the values of both components.

The residential occupants have to deal with the non-residential uses onsite, which tend to include additional noise, pedestrian traffic during business hours and other distractions they wouldn’t have to deal with if all their neighbors were residences. It’s especially bad if one or more of the commercial units below involve any kind of cooking or alcohol. If you take the quaint little coffee shops and pubs and cafes out that doesn’t leave much in the way of potential tenants who can generate enough business to justify the rents.

The commercial occupants also have to deal with the non-commercial occupancy onsite, and that includes dealing with complaints from the noise their business generates. These projects never provide enough onsite parking, which means that the businesses have to rely on pedestrian traffic for access.

It usually takes a long time to find commercial tenants for those units and they never generate as much rent as they would if the unit was part of a dedicated office or retail building. The residential tenants never pay quite as much as they would in a dedicated residential building. Even the expense terms for the different types of occupancy is different.

Pick a property type and stick with it.

BTW, if you have a lot of exposure right now with office or retail properties you might consider getting out now while you still can. The same idiots who were flipping houses got into small commercial projects and they have displayed the same ignorance. What’s happened with houses absolutely will happen with the commercial properties, except those will unwind much more quickly.

[4plexowner]

yep, gonna be bargains in commercial real estate too!!!

another factor with mixed use in California is the ban on smoking inside restaurants, pubs, etc – this law forces the smokers onto the sidewalk in front of these businesses – anyone living upstairs (or nearby) would have to keep their windows closed or live with second-hand smoke

[SD Realtor]

my wife almost bought commercial last year and I am glad we did not.

I am very much with you 4plex.

SD Realtor

[SD Realtor]

my wife almost bought commercial last year and I am glad we did not.

I am very much with you 4plex.

SD Realtor

[SD Realtor]

my wife almost bought commercial last year and I am glad we did not.

I am very much with you 4plex.

SD Realtor

[SD Realtor]

my wife almost bought commercial last year and I am glad we did not.

I am very much with you 4plex.

SD Realtor

[4plexowner]

yep, gonna be bargains in commercial real estate too!!!

another factor with mixed use in California is the ban on smoking inside restaurants, pubs, etc – this law forces the smokers onto the sidewalk in front of these businesses – anyone living upstairs (or nearby) would have to keep their windows closed or live with second-hand smoke

[4plexowner]

yep, gonna be bargains in commercial real estate too!!!

another factor with mixed use in California is the ban on smoking inside restaurants, pubs, etc – this law forces the smokers onto the sidewalk in front of these businesses – anyone living upstairs (or nearby) would have to keep their windows closed or live with second-hand smoke

[4plexowner]

yep, gonna be bargains in commercial real estate too!!!

another factor with mixed use in California is the ban on smoking inside restaurants, pubs, etc – this law forces the smokers onto the sidewalk in front of these businesses – anyone living upstairs (or nearby) would have to keep their windows closed or live with second-hand smoke

[Bugs]

My advice is to stay away from them. Mixed use projects are appealing to the planners and environmentalists who want to build high density communities. However, the realities are that mixing disparate uses ultimately detracts from the values of both components.

The residential occupants have to deal with the non-residential uses onsite, which tend to include additional noise, pedestrian traffic during business hours and other distractions they wouldn’t have to deal with if all their neighbors were residences. It’s especially bad if one or more of the commercial units below involve any kind of cooking or alcohol. If you take the quaint little coffee shops and pubs and cafes out that doesn’t leave much in the way of potential tenants who can generate enough business to justify the rents.

The commercial occupants also have to deal with the non-commercial occupancy onsite, and that includes dealing with complaints from the noise their business generates. These projects never provide enough onsite parking, which means that the businesses have to rely on pedestrian traffic for access.

It usually takes a long time to find commercial tenants for those units and they never generate as much rent as they would if the unit was part of a dedicated office or retail building. The residential tenants never pay quite as much as they would in a dedicated residential building. Even the expense terms for the different types of occupancy is different.

Pick a property type and stick with it.

BTW, if you have a lot of exposure right now with office or retail properties you might consider getting out now while you still can. The same idiots who were flipping houses got into small commercial projects and they have displayed the same ignorance. What’s happened with houses absolutely will happen with the commercial properties, except those will unwind much more quickly.

[Bugs]

My advice is to stay away from them. Mixed use projects are appealing to the planners and environmentalists who want to build high density communities. However, the realities are that mixing disparate uses ultimately detracts from the values of both components.

The residential occupants have to deal with the non-residential uses onsite, which tend to include additional noise, pedestrian traffic during business hours and other distractions they wouldn’t have to deal with if all their neighbors were residences. It’s especially bad if one or more of the commercial units below involve any kind of cooking or alcohol. If you take the quaint little coffee shops and pubs and cafes out that doesn’t leave much in the way of potential tenants who can generate enough business to justify the rents.

The commercial occupants also have to deal with the non-commercial occupancy onsite, and that includes dealing with complaints from the noise their business generates. These projects never provide enough onsite parking, which means that the businesses have to rely on pedestrian traffic for access.

It usually takes a long time to find commercial tenants for those units and they never generate as much rent as they would if the unit was part of a dedicated office or retail building. The residential tenants never pay quite as much as they would in a dedicated residential building. Even the expense terms for the different types of occupancy is different.

Pick a property type and stick with it.

BTW, if you have a lot of exposure right now with office or retail properties you might consider getting out now while you still can. The same idiots who were flipping houses got into small commercial projects and they have displayed the same ignorance. What’s happened with houses absolutely will happen with the commercial properties, except those will unwind much more quickly.

[Bugs]

My advice is to stay away from them. Mixed use projects are appealing to the planners and environmentalists who want to build high density communities. However, the realities are that mixing disparate uses ultimately detracts from the values of both components.

The residential occupants have to deal with the non-residential uses onsite, which tend to include additional noise, pedestrian traffic during business hours and other distractions they wouldn’t have to deal with if all their neighbors were residences. It’s especially bad if one or more of the commercial units below involve any kind of cooking or alcohol. If you take the quaint little coffee shops and pubs and cafes out that doesn’t leave much in the way of potential tenants who can generate enough business to justify the rents.

The commercial occupants also have to deal with the non-commercial occupancy onsite, and that includes dealing with complaints from the noise their business generates. These projects never provide enough onsite parking, which means that the businesses have to rely on pedestrian traffic for access.

It usually takes a long time to find commercial tenants for those units and they never generate as much rent as they would if the unit was part of a dedicated office or retail building. The residential tenants never pay quite as much as they would in a dedicated residential building. Even the expense terms for the different types of occupancy is different.

Pick a property type and stick with it.

BTW, if you have a lot of exposure right now with office or retail properties you might consider getting out now while you still can. The same idiots who were flipping houses got into small commercial projects and they have displayed the same ignorance. What’s happened with houses absolutely will happen with the commercial properties, except those will unwind much more quickly.

[Author]

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