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March 8, 2007

Mixed-use condos make good business sense

  • Developers are combining residential, office and retail elements on single sites because of high land prices, stringent growth regulations and Seattle’s unique geography.
    Vulcan Inc.

    Image courtesy of Vulcan Inc.
    Vulcan’s 2201 Westlake will combine a 12-story office tower and 19-story condo tower with ground-level retail.

    Mixed-use is a term that’s becoming increasingly common in Seattle’s lexicon as the city moves closer towards a livable 24-hour urban center. Today, developers are redefining mixed-use condominium projects in innovative ways, merging complementary uses to enhance space and create vibrant environments while combating sprawl.

    Increasing traffic congestion, the need for community and a sense of place, and a greater awareness of environmentally sensitive development have spurred a desire for places where people can interact in a true urban environment.

    Mixed-use developments make particular sense in Seattle, where high land prices, unique geography and stringent regulations that limit growth encourage developers to maximize limited space by using a mix of residential, office and retail elements on a single site.

    Such developments help establish round-the-clock environments, creating the energy and convenience that is increasingly drawing people to in-city living. But the merging of uses requires careful thought and planning from the outset. What may work in one location won’t necessarily work elsewhere, and numerous factors must be taken into account.

    To succeed, mixed-use condo developments must be planned with consideration for their location within the broader neighborhood and the market forces affecting that community. What is the market outlook for each of the project’s various uses? How does the new development complement the existing character of the neighborhood and create a stronger sense of place? What type of retail is most appropriate? How do you balance security versus 24-hour access?

    Optimizing 24-7 uses

    As the poster child for mixed-use condo projects in Seattle, Vulcan’s 2200 development at the gateway to South Lake Union serves as a dynamic destination lifestyle center with 261 condos, a Pan Pacific hotel, a Whole Foods Market and 46,000 square feet of diverse services, shops and restaurants. With each of the four corners of the project representing distinct yet complementary uses, 2200 has energized South Lake Union by bringing a truly mixed-use environment to life — unlike many neighborhoods that may be primarily commercial or residential in nature.

    At the time planning began for 2200, South Lake Union was still unproven as an area for mixed-use development. From the outset, the project team understood that the inclusion of a major urban grocery store was essential to the vitality of the larger neighborhood as a place to live. The combination of a premier hotel and condos also led to integrating hotel amenities so that residents can take advantage of such things as housekeeping and room service.

    The amount of parking needed for these types of mixed-use projects can also be reduced and shared since peak demand times vary between the different uses. For example, 2200’s underground parking accommodates several diverse uses, including separate homeowner parking, Whole Foods Market parking and a loading dock.

    Mixed-use design can also be leveraged to maximize energy efficiency gained from each of the project’s distinct uses. For example, Vulcan’s 2201 Westlake office/condo project will optimize energy use by taking advantage of the two occupancy cycles of its users. Excess heat generated from cooling the office portion during the day will be used for the condos at night.

    At 2200, heat generated from the grocery’s refrigerators is captured and distributed throughout the entire project.

    Because a mixed-use development often includes a variety of uses throughout the day within a single building, balancing security needs and 24-7 accessibility for residents can pose unique challenges. The design for 2201 Westlake, for instance, takes these considerations into account by creating separate pedestrian entrances for office workers and residents.

    The parking garage is similarly segregated. While there is only one garage entrance, the parking stalls and elevators for each use are separated to control access to the different uses within the project.

    Market forces

    The success of the 2200 project has encouraged new and complementary mixed-use developments nearby, including the 2201 Westlake project, which is under construction across the street with a 12-story office tower, 19-story condo tower and retail.

    These types of developments are also well positioned to capitalize on particularly strong market forces at a given time in defining the appropriate mix of uses within a project. With Seattle’s office market ranked first in the nation for 2007 in terms of investor interest and confidence by the Urban Land Institute, and the area’s still promising outlook for condos continuing to defy gloomier prospects across the country, integrating both sectors into a single project can make good business sense. During the post dot-com bust in early 2000, however, many mixed-use projects realized a greater opportunity by foregoing office space to incorporate sought-after residential, hospitality and retail uses.

    Fostering community

    Integrating community needs into the design is essential in developing successful mixed-use condo developments that embody a true live-work-play environment. To do so requires taking into account shared spaces, landscaping, retail amenities, accessible public transportation and a people-friendly streetscape to create an appealing sense of place for tenants and residents.

    As part of an active mixed-use environment, 2200 is designed to enhance the pedestrian and neighborhood shopping experience by incorporating shared gathering spaces for greater community interactions and overall aesthetic appeal. At the heart of the project, an expansive European-inspired outdoor retail plaza atop a grand central staircase — suitable for concerts, community events or lunch — offers one-stop services against a backdrop of the Space Needle.

    The project’s landscape also creates a striking city-within-a-city atmosphere with a diversity of uses on all sides of the development, including retail access, shared pedestrian and automobile paths as well as live/work lofts and ground-level townhomes with landscaped terraces.

    Providing adequate linkages to new transit and supporting alternative means of commuting, such as Flexcar and bicycles, represents a crucial component of any successful mixed-use endeavor.

    While mixed-use condo projects are by no means a new phenomenon, developers are taking the concept to a level never seen before in the local market, contributing to Seattle’s rising star power as a thriving world-class city.

    Ada M. Healey is vice president of real estate for Vulcan Inc., which manages a diverse development portfolio that includes approximately 60 acres in Seattle’s South Lake Union neighborhood.

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