Add residential, retail, and other commercial tenants and stir

Ever since mom and pop lived above their haberdashery and assorted sundries shop, mixed-use buildings have been a staple of countless cities and towns. And these properties have evolved to become essential components in the design and building of livable, workable, and walkable neighborhoods and downtowns.

In today’s world, where buildings and footprints are larger and taller, the people upstairs are more likely to be customers than owners of the businesses at street level. Creating the perfect mix in a mixed-use setting is necessary to satisfy both residential and retail tenants. Although there isn’t one perfect recipe, there are several key ingredients.

Working with the retail tenant

When it comes to residential and office tenants, there is very little interaction between them and their landlord or building management. For the most part, everyone goes about his or her day until something comes up.

That dynamic changes with the retail tenant, many of whom have leases that include a percentage rate clause. Increased sales for the retail tenant translate into an additional rent percentage for the landlord/manager. This monetary incentive often results in greater contact between the tenant and building management, the latter of whom often feels compelled to problem solve and market the retail space.

When the customer is always right

On the one hand, retail tenants have the usual concerns of any tenant: price per square foot, ceiling heights, facilities, maintenance, etc. On the other hand, they have – and must have – a keen awareness of how their location impacts the customer experience. As a result, one of the most frequently asked questions is, “Who is above me?” Any disruption to potential revenue not only has a negative impact on them – it can also leave the landlord with a vacant storefront.

In addition, the customer experience is constantly evolving and often requires the landlord or building management to improvise. Consider a retail establishment that does so well that parking becomes an issue for that tenant, neighboring retail tenants, and the residents above. Both tenants and landlords must adapt to and ideally plan ahead for these scenarios.

Speaking of the people upstairs …

Perhaps the most important ingredient in determining the mix in a mixed-use building is to be mindful of the residents who will be living above any retail space. Businesses that create excessive noise, smells, vermin, and trash generally lead to the most complaints from upstairs neighbors.

A solution is for the landlord/building manager is to match the retail tenant with the residential tenant and/or the neighborhood. Some examples:

  • A satellite dry cleaner – one that collects the laundry and sends it out for cleaning –

would work well in an area where there aren’t any dry cleaners.

  • Millennial tenants may be more interested in living near a coffee house or socially-conscious boutique, while young families may need a small corner market to pick up some milk or fruit.
  • Baby boomers may prefer something more upscale, while senior citizens may opt for a location featuring a small medical office. In Fort Lauderdale, for example, Riverwalk Residences of Las Olas will have medical offices at street level.

Key ingredients that work for Morris

Managing a mixed-use property requires some of the same skills that have helped Morris Southeast Group successfully serve our clients: open and clear communication, understanding the specific nuances and needs that inform a smart CRE strategy, and transparency to head off any anxieties.

For a free consultation or to learn more about our property management services and/or mixed-use opportunities, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at