The Effects of New Market Forces on Mixed-Use Development

We have an opportunity to consolidate insights from engineers, health care providers, urban planners, and psychologists to inform our approach. Mixed-use projects are the pinnacle of real estate development — highly valuable and endlessly complex. They require deft management of variables including diverse spatial needs, regulatory hurdles, costing, and construction. Add the pandemic to these spinning plates, and even a skilled mixed-use development team will be challenged.

At the moment, we are still in a place where some answers are a work in progress, and some are coming on-line. We are at an exciting point in time in the design world, where we are all participating in this living laboratory. We know a few things — If we had seen this event last only a few months, the outcomes would have been dramatically different and less radical. The length and depth of the pandemic are changing important details of every business model, and a universal understanding has emerged.

What has worked in the marketplace will not be good enough moving forward.

The benefits of mixed-use developments are still valid: convenience, no commute, walkability. But these benefits must now be measured against their cost — density and the threat crowding presents to public health, wellness, safety, and security. Frivolous amenities will matter less. Designers and developers will seek a balance between boundless urbanity and personal boundaries. Ultimately, cities are resilient, and so is humanity. People are inherently social, and our need for connection, affection, and collaboration will continue in a post-pandemic world. Mixed-use urban projects present an opportunity to cater to these human needs at a controlled and responsible scale.

There may be no better time to build.

The best time to be an architect in Chicago was the day after the cow kicked over the lamp in 1871. There may be parallels to today. It’s worth a discussion to start to define what opportunities are on the other side of the pandemic. We can either continue to lament the things we cannot do or embrace the opportunity to think about what we can do. Reimagine, rebuild, recover.

The pandemic should not distract us from our core values and our purpose: to enhance lives through design. We are all being forced to break from the status quo, which in turn breeds innovation. It’s time to begin again, and designers should illuminate the way. We need to provide clear leadership, creating dynamic urban environments with diversity and opportunities for enrichment.

And we should collaborate with scientists and engineers.

We also need to step outside the “design world” — to formally engage scientists, researchers, and engineers. This requires a shift from temporary collaboration to intentional, long-term partnerships. We must deepen our relationships with our partners in STEM, medicine, and big data, among other disciplines.

Data will drive our design decisions.

Data in mixed-use is critical now (hours of work, spacing, temperature, best uses), so we must engage scientists and engineering. It’s time for right-brain and left-brain disciplines to shape the future of urban design and mixed-use developments, together.

Large-scale mixed-use projects will reshape cities.

We expect health and innovation uses will continue to anchor large-scale developments in most global cities. In Chicago alone, for example, 12 large-scale, multi-billion dollar, mixed-use rebuilding projects are underway. Among them are The Michael Reese Hospital redevelopment by Farpoint, One Central by Landmark, the 78 by Related, and Goose Island by Sterling Bay. Over several years, each will redevelop a key strategic area of the city.

Small-scale infill projects can serve civic needs.

Urban infill projects (often) take a singular parcel with an outdated use, like a defunct department store, and repurpose it with a mix of residential, office, and retail. If developers collaborate with cities to simultaneously address a civic need, like a grocery near a new transit stop on a busy line, the project can have an easier path to completion. With a balanced approach, small scale mixed-use infill projects can mitigate risk while maximizing value, not only for the developer but the community at-large.

Re-use projects will resurrect urban structures.

We also anticipate that re-use of existing B/C urban building stock will continue and perhaps accelerate. Industrial buildings are becoming tech offices, C-grade offices are partially converting to hotels, and multi-story department stores are converting upper floors to office space while maintaining retail on the ground floor.

• Market preferences will be forever changed.
• Mixed-use developments have an opportunity to satisfy the social needs and desires of an urban population in a safer format.
• New market forces will be applied to every piece of real estate, collaboration across disciplines will intensify and deepen, and data will drive design decisions.