Mastering the mixed-use property management ecosystem

Today’s mixed-use developments are increasingly recognized for their upside potential as well as the positive impact they generate within communities. But bringing these vibrant “cities within a city” to life in a way that also maximizes cash flow presents a sizable hurdle. 

When office, retail, multifamily and hospitality coexist on a single site, the success of the development largely falls on the management and leasing strategy. It’s about so much more than tracking revenue streams. The competing interests of the varying asset types must be set aside for the benefit of the entire property ecosystem, which is easier said than done.

There are several strategies for creating an integrated approach that not only enhances the consumer experience but also drives foot traffic, keeps people on site and best positions the property for achieving ownership’s investment goals. It all starts with communication and collaboration.

A collaborative approach is fundamental to managing mixed-use properties, and it works even better if there is a property manager or general manager serving as an impartial “maestro” orchestrating a holistic cross-property strategy. Regularly bringing property managers and stakeholders together from all asset types facilitates meaningful discussions aimed at maximizing property value. This collaborative mindset fosters idea exchange, enabling a more holistic decision-making process. Most importantly, it establishes trust and teamwork.

Ignoring this strategy can dilute brand strength and visitor experience. For example, what if the hotel general manager plans a big event but does not include the valet manager in the planning? What if the multifamily property has scheduled an event on the common lawn at the same time landscaping is scheduled by the office manager? There are an overwhelming number of decisions being made daily that affect multiple stakeholders, and without the right coordination of those decisions and resulting activities through a project-wide leadership structure, there is no line of sight between all stakeholders. These blind spots lead to a functional break down, and reputational risk grows.

Another benefit of a vertically integrated management platform is the economy of scale that comes from shared goods and services. Leveraging service contracts and material purchases across the project uses creates scale unachieved by any single use. Examples of this scale include everything from elevator maintenance, janitorial services and products, security and engineering services. Leveraging this scale creates efficiency, better coordination and opportunities for cost optimization.

An annual planning session with all stakeholders to create a collaborative business plan and budget is highly recommended. This initial session, reinforced by cadenced operational meetings throughout the year, ensures continued alignment and a sound operational and financial strategy. It is also critical for delivering a cohesive and authentic experience for project end users, such as tenants, residents, shoppers, hotel guests and other visitors.

“In developing an operational business plan with multi-stakeholder consideration, it helps to invoke an inclusive approach like a charette process where everyone has a voice, but ultimately achieve alignment in how to proceed,” said Sean McNamara, Managing Director, Mixed-use Property Management at JLL. “When time, effort, money and ultimately project brand identity are at risk, it is important to get stakeholder alignment.”