Communities looking for density on small available sites are pushing for multiple uses, according to Kite, the president and CEO of Indianapolis-based Kite Realty. Mixed-use has rapidly become important to the development company, which went public in August 2004, and has more than $500 million in projects in the pipeline. Much of its focus will be in the Southeast, particularly Florida and North Carolina.
"There is more risk because of the various product types," Kite says. "But ultimately you'll see more of it, because that's what the cities want." That can help with the most challenging part of the development process, getting entitlements in place, he says.
"The entitlement process is a tougher and tougher barrier to entry," Kite observes. That can affect the returns, which are important to the format, he said, and could even affect its growth.
"If returns start to go down, we will see less of this," Kite warns. "It's very complicated."
Kite owns 48 retail properties totaling 6.9-million sf. The firm is currently developing 11 assets, making up 1.7-million sf
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