Apartments In Mixed-Use Buildings Are Skyrocketing

The number of apartments in live-work-play buildings has quadrupled over the last decade, led by Manhattan, home to one-fifth of the total units in US mixed-use buildings. 

A RentCafe analysis of Yardi Matrix data reveals that 43,700 apartments in mixed-use buildings were added to the market in 2021 compared to 10,000 a decade prior. Construction deliveries peaked in 2020, with 49,100 such apartments coming online. 

And “the growth of live-work-play is even more impressive when looking beyond the past decade,” RentCafe’s Andrea Neculae writes. “In 2011 and earlier, mixed-use was barely existent, making up a mere 2% of overall projects with a total of 225,100 apartments built up to 2011. However, after leaping to 6% in 2012, that share continued its spectacular rise in popularity, representing more than 10% of apartments today.”

Now, there are an estimated 580,000 apartments in live-work-play buildings nationwide — more than double that of 2011. However, 2021 showed a slowdown in construction, thanks largely to supply chain woes and materials and labor price increases. 

Doug Ressler, manager of business intelligence at Yardi Matrix, told RentCafe he expects “a rebound in 2022 rental housing deliveries” for this type of development.

“Similarly, in light of hybrid work expanding rapidly across the nation, the way that large office buildings decide to use their leased spaces might also positively affect the popularity of LWP,” Neculae says.

The cities with the most apartments in live-work-play buildings are Manhattan; Brooklyn; Washington, D.C.; Chicago; Los Angeles; Philadelphia; Dallas; Queens; Atlanta; Boston; Seattle; Austin; San Francisco; Jersey City, NJ; Arlington, Va.; San Jose; Houston; Miami; Charlotte; and Baltimore.

Washington, D.C. also is the decade leader of LWP, with a total of 17,300 units added since 2012. RentCafe notes that in 2020, nearly half of all jobs in D.C. could be done at home, “putting a strain on office-centered neighborhoods and justifying the need for mixed-use communities.” But “the best is yet to come” for the asset class in DC, especially thanks to a huge project spanning two city blocks in Buzzard Point.

A recent national office report from CommercialEdge says the development side of the sector will be offered a lifeline via mixed-use projects, despite some early naysayers who opined that the pandemic would deal a deadly blow to such deals

“Now, emerging trends suggest that mixed-use development can meet the post-pandemic demands of developers, owners, tenants and workers,” CommercialEdge writes. “For owners and developers, mixed-use can offer protection from office’s uncertain future by diversifying across asset classes. Many companies that adopt a hybrid work strategy will look for ways to draw their employees into offices without forcing them to do so in a tight labor market. One way to achieve this will be to locate in a building that provides a wide array of amenities, including options for retail and dining.”