Vertical properties with retail on the ground floor and office space on the upper floors is a common approach to mixed-use spaces.
However, two vice presidents at United Properties’ Denver office are mixing up the mixed-use space.
Horizontal properties with industrial and retail components, as well as some office, are the direction Kevin Kelley and Alicia Rhymer are going.
"We’re calling this the ‘next-gen mixed-use,’ which are sites that blend light industrial, office and retail in one development," said Rhymer, vice president of retail development at the Denver office of Minneapolis-based United Properties. "Workers want more convenience, and retailers want to be where the customers are — we just put the two of them together."
These two property types want similar site attributes, such as strong visibility and access to major commercial roads said Kelley, executive vice president.
"Based on my background developing retail centers, I have always been drawn to sites that offer excellent visibility and access along major commercial arterials," he said.
United Properties will develop Tower Business Center in Aurora. It will have 45,000 square feet of industrial space, as well as a 7-Eleven and a Ronny’s Car Wash.
Retailers want good visibility to attract consumers. Light industrial, which often includes distribution sites, benefits from good access to major thoroughfares for shipping purposes.
Kelley added that these sites are generally more expensive, but they come with the ability to do other kinds of uses.
"Industrial has been a very popular product, and it’s growing dramatically," he said. "There’s good demand for our product, and good interest from Alicia’s tenants."
One of United Properties’ developments is located at East 40th Avenue and Central Park Boulevard in Stapleton. Called Enterprise Business Center, it has a little over 3 acres of retail in front of a large, flexible industrial development.
Slated to be completed in 2018, the property will have a Starbucks, Cheba Hut, F45 Training, Fuzzy’s Taco shop and a day care.
A rendering of the retail component of Enterprise Business Center, expected to be completed later this year.
As retail changes in the age of e-commerce and consumer demand for greater convenience, having the strong on-site consumer is a good fit for many retailers, Rhymer said.
"For the retailers, it’s nice to have 2,000-plus employees right behind them within walking distance," she said. "It allows them to have an all-day access to a strong customer base."
Industrial is normally "tucked away," as Kelley said, meaning an on-site cafeteria or driving out to get food is common for the workers.
Having the walkability of retail on-site is a big incentive in attractive industrial tenants, he said.
The retail also helps with the infrastructure and land cost for the industrial.
Kelley added that industry is evolving, as it takes on more of an "office" feeling and is more lighter manufacturing and distribution.
Industrial buildings are more attractive to tenants, as the "rough-and-tumble" style becomes popular, he said.
Exposed brick and plumbing systems, open ceiling plans and industrial-style lighting has become attractive for many tenants.
"The rougher, the better," he said.
Rhymer pointed out that while there are still dock doors on these buildings, there is a lot more glass and stainless steel to balance it out and give it a more chic, polished look than a traditional industrial building.
"I think the product is evolving quite a bit," Kelley said.