Vertical Mixed Use Best Practices: Developing Residential Over a Grocer

August 21, 2014

Research

Vertical mixed use has become the dominant form of development in urban areas–especially apartments over a grocery store. Three such projects are now under construction in the Washington, D.C. region and at least seven have already been built. But this is a very difficult project type to get right. There are many areas for conflict in both design and development because the needs and self-interests of residential tenants and grocery store operators/customers are often in direct conflict.

Students in the MS in Real Estate Development (MRED) program at George Mason recently gathered in Alexandria (VA) at The Kingsley apartment complex for a first-hand look at these potentially fatal conflicts and how they can be resolved.  In addition to 175 luxury rental units, The Kingsley will soon be home to a 52,000 sq. ft. Harris Teeter, the first full-service grocery to be built in historic Old Town Alexandria in 50 years.  The project team includes

Vertical Mixed Use–Collaboration Required

“In projects like these, the first task of the developer is to recognize the inevitability of user conflicts and assemble a design team that can understand and represent the needs/interests of both retail and residential users,” said Bob Wulff, Program Director of MS in Real Estate Development at Mason.

Among the issues considered by The Kingsley team:

  • What uses to segregate—in the Kingsley case, parking (150 spaces for Harris Teeter on P1; 228 residential spots on P2 and P3) loading docks (fully enclosed, self-contained bays accommodating up to 100 deliveries a day), pedestrian access and building security
  • When to integrate uses—risers and clean-out access on residential floors as well as rooftop mechanical equipment
  • How integration affects the multifamily layout –considering the sounds, smells, vibration and hours of operation for a full-service grocery

Despite the challenges of merging conflicting interests, the case study presenters–Kingsley McAdam, Buchanan; Murray Walker, Davis, Carter Scott and Cary Judd, KLNB—also were clear on the benefits of building apartments over a grocer:

  • Positive overall project recognition from a branded grocery tenant
  • Increased income security with significant net operating income in place before groundbreaking
  • Possibility of negotiating greater density rates, faster zoning approvals from the local jurisdiction
  • Higher multifamily rents by providing an in-demand amenity

“Having a well-known client like Harris Teeter as our sole tenant has eliminated a great deal of the ambiguity that can come with retail development,” said Buchanan’s McAdam.  “It has been an ideal collaboration.”

For more information on design considerations in vertical mixed use best practices, download “Design Lessons for Developing Housing Over Retail:  The Clarendon Center” by Bob Wulff (Real Estate Review, Volume 41, Number 4, Winter 2012)

2014 07 09 18.18.15 Vertical Mixed Use Best Practices:  Developing Residential Over a Grocer

The soaring 5,500 sq. ft. lobby of The Kingsley apartments provided a dramatic backdrop for the an on-site case study for students in the George Mason MS in Real Estate Development program.
“This was one of the most “inside baseball” talks that I’ve heard at an industry event,” said Mason student Greg Hoffman, project manager at Manhattan Construction.

 

2014 07 09 19.20.20 Vertical Mixed Use Best Practices:  Developing Residential Over a Grocer

“I most enjoyed learning how the development team prevented sound and vibration issues ” said Will Tees, PNC Realty Investors and Mason alum (here with program director Bob Wulff). “I’m dealing with similar issues on a shopping center project in New Jersey.”

 

2014 07 09 19.03.46 Vertical Mixed Use Best Practices:  Developing Residential Over a Grocer

Kingsley McAdam and Buchanan partner Steve Hubert share a behind-the-scenes look at the almost-complete Harris Teeter, as MRED student Hamza Rashid surveys the scene.

, , , ,

About Janet Palmisano

I am the program coordinator for the Masters in Real Estate Development at George Mason University's School of Business.

View all posts by Janet Palmisano

No comments yet.

Leave a Reply

%d bloggers like this: