mixed use property
Jun 20, 2020

There are numerous ways in which you can invest in commercial real estate.

To successfully diversify your portfolio, you must first understand what opportunities are available. One way to build this knowledge is to understand the different types of commercial real estate. Then, in the future, you can use this knowledge to properly assess a project you wish to invest in.

The same can be said for commercial real estate projects. By understanding the type of property you wish to construct, you can better understand your project’s needs and requirements.

In this article, we discuss a specific type of commercial real estate development: mixed use property. Keep reading to learn what mixed use properties are, examples of projects using this development, and how to finance them.

Investing in Mixed Use Property: What to Know

What is a Mixed Use Property?

In real estate, a property’s type depends on how it is used.

Let’s look at a common example of a commercial real estate property: a hotel.

A hotel property would be referred to as a “single purpose property.”

Conversely, a multi use property, when compared to a single purpose one, integrates multiple business types into one property.

If a building dedicates its ground floors to professional office spaces while using its upper floors for a hotel, it can be considered a mixed use property.

Types of Mixed Use Real Estate Projects

A mixed use property can have various combinations of business types. Below, we’ve compiled a list of mixed use projects to provide you with real-world examples:

  • Port Covington:
    • This project is located in Baltimore’s Port Covington. The developers of the projects announced in 2018 that the project would include a mixed use phase. They have plans to include apartments, a grocery store, and an office space into the development.
  • The Wharf
    • This is located in Washington, D.C. The development is composed of various business types, including restaurants, shops, and residences.
    • Hoffman & Associates and Madison Marquette comprise the project’s development team. Both developers are known for their experience in developing mixed use projects.
  • Lincoln Yards
    • With a vision to rejuvenate Chicago’s North Branch Corridor. The Lincoln Yards project intends is a mixed use property featuring businesses, residences, parks, and more.

While these are just a few examples of mixed use projects, they can give you a broad understanding of how developers go about creating these projects.

Financing a Mixed Use Commercial Real Estate Project

The most important part of any commercial real estate project is financing. This is no different for mixed use projects.

A common financing solution for all types of real estate projects is a loan. Your first step in obtaining a commercial real estate loan is to outline your project.

Determine what the vision of your project is. What kind of mixed use project are you undertaking? Does your project focus on two business types in one space or multiple integrated businesses?

Once you’ve outlined the structure of your project, you can explore various types of commercial real estate loans. Some of the most common loan types you’ll encounter include SBA 504, SBA 7(a) and Bridge loans.

An SBA 504 loan is structured to aid a borrower in the purchase of commercial real estate and necessary equipment. Generally, this loan is used for projects meant to maintain or update a property.

Let’s say you want to purchase a property and expand the business types within it. If so, then an SBA 504 loan would be beneficial. However, other loan types may fit your project better, especially if you intend to do any construction.

Another loan to consider is the SBA 7(a) loan. SBA 7(a) loans are most beneficial for mixed use projects that need funds for construction efforts.

A unique financing solution is a bridge loan. This loan is most beneficial when making time-sensitive decisions in purchasing property. Because a bridge loan is made for timely funding, they are a good option for short-term financing.

Obtain the Funding and Guidance Your Project Needs

In the end, the type of funding you might want will depend on your project’s needs. As we shared before, outlining your project before looking for funding can help streamline this process.

Nevertheless, knowing what loan is the right choice can still seem challenging. However, with the guidance of a team with years of commercial real estate experience, you can find the right funding solution for you.

By partnering with the team at AVANA Capital, you can receive a personalized loan for your project.

AVANA’s team will walk you through the loan underwriting process, so you have a comprehensive understanding of your loan.

Are you looking for a financing solution for your commercial multi-use project?

Contact the team at AVANA Capital today and discover what solution can help your project succeed.