Milhaus - vertical mixed-use and urban infill residential environments

posts tagged "mixed use"

Mixed Use Proforma's - Garbage in/Garbage Out

Posted on July 30, 2010 by Tadd Miller

You can make a proforma say whatever you want, no matter how fancy the format, and how big or small the file, as the majority of the real success in doing a solid proforma is what you can't see in it, but what it is populated with. Much like the old software/technology phrase "garbage in, garbage out" type of analysis. This is probably one of the biggest issues in mixed use development, as we all want our projects to work, and there is no easier place to allow our own bias to ensnare us in than in the proforma preparation stage, especially on those portions of the project that are not our specialty. When you don't have specialist in a mixed use project from the beginning, the retail developer inflates the residential land cost and underestimates the expenses, or visa versa with a residential lead. This is how a lot of guys who want to control the own deal, and try to build the product that they don't know about themselves get themselves in a jackpot. If you don't have a specialist on the other end to catch these things, then you lie to yourself, at which point your project is doomed. It is imperative that you get involved at the very front end professionals that can second guess your proforma from all angles of the development and product. Without doing this, to make assumptions on product which you don't regularly develop is a definite way to get yourself in trouble quickly.

This entry was posted in Design, Our Philosophy and tagged mixed use, mixed use development, Milhaus, virtual shopping, urban infill

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Mixed Use Success – Stick With What You Know!

Posted on July 27, 2010 by Tadd Miller

Mixed use requires residential, retail, and office components to be individually successful. Empty retail dramatically affects residential rents/absorption, just as residential failure destroys retail value within a project. To create success in this environment, mixed use developers must be realistic about their expertise and capacity. Retail developers are “business-to-business” operators, while residential developers service customers’ homes 24/7, two extremely different cultures; which if redirected, destroys customer confidence leading to project failure or value limitations. This need for focus and specialization is what is driving the multiple joint ventures that are taking place among real estate companies throughout the country.

Historically, real estate developers have made investments outside their focus area all too often, and the evidence shows a lack of return on capital. Most of the developers either cap their future capacity by continuing to struggle through, or more appropriately take a loss to exit the new venture in order to get back to their core focus. As a developer and entreprenuer, I understand the desire to control my own destiny, and fall into the “if someone else can do it, than so can I,” trap, but I have also learned the dangers of acting on those thoughts.

Unsuccessful projects are a big black eye for all mixed use projects. Find a partner or provider for the product in which you don’t excel, make sure they have been through the development of a mixed use project before, and lock them in to help them complete your next mixed use project, and that will be a big step towards making your project successful!

This entry was posted in Our Philosophy, Redevelopment and tagged mixed use, mixed use development, joint ventures, partnerships

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Mixed Use driven by Mass Media Influences

Posted on July 19, 2010 by Tadd Miller

packard-street-view-300x237 Urban lifestyle depictions by the mass media significantly impact the continued urban renaissance. The first TV episodes I enjoyed were Andy Griffith and the Walton’s; then the Brady Bunch and Cosby, and then on to Seinfeld and Law and Order. I saw television personalities starting with the Walton farm, then the Huxtable townhouse, and furthermore into Seinfeld’s New York condo. Quite a lifestyle and storyline transition in prime time television programming for a 20 year span. There is no doubt in my mind that this had an impact on my lifestyle choice of a mid-rise condo near Monument Circle in downtown Indianapolis.

From this personal experience, I would argue that this storyline transition has accurately reflected the rebirth of urban America. Many people choosing their first place to live after college over the last decade help make Friends and Sex and the City two of the most popular shows. Furthermore, look at tonight’s television list on one station, and you see How I Met Your Mother, Big Bang Theory, Rules of Engagement, and CSI: Miami in the 3 hour primetime lineup, which are all very urban based storylines and backdrops.

Of course I am biased as I want to validate my downtown, condo lifestyle, but what blogger doesn’t have some bias. I can only hope mass media continues to have a focus on urban based shows that no doubt help reaffirm that urban lifestyle is definitely cool (and the sustainable option as well if you read “Green Metropolis” by David Owens)!

This entry was posted in Housing, Lifestyle, Our Philosophy and tagged Urban Infill, mixed use, mixed use development, downtown living, generation y, urban living

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Build it once. Operate it forever.

Posted on July 13, 2010 by Tadd Miller

mixed-use-bank-one-300x240 Parking costs are always discussed as the biggest impediment to mixed use and urban infill projects; and that is correct, especially when analyzing up front capital costs. However, developers often focus too much on the initial costs risks, glossing over the operating costs of a new project. Milhaus would argue that what constitutes the biggest impact on the costs of urban infill and mixed use development is the efficiency of the building; which is driven predominately by the density of the product. Common corridors, common amenities, vertical shaft maintenance, interstitial space, security, etc., all comprise the true costs that must be included in the proforma.

Milhaus is regularly presented with urban projects and proformas that include per-unit operating costs calculated by averaging surrounding suburban, slab on grade, non-corridor design, and surface parking lots. All the while, the same developer in the same proforma has completed serious budgeting and gained significant contractor input for construction costs, infrastructure improvements, FF&E, and all the up front capital components.

Now, a good analyst understands the dramatic affect that a small per-unit operating cost adjustment can make to a proforma. Sometimes, a few hundred dollars per unit can have a bigger effect than manipulating the size of a parking garage. As a developer, investor or banker, make sure that you do a thorough analysis of these portions of the budget. A failed mixed use or urban infill project negatively affects far more people than those involved with the project itself. Remember that you only build it once, but you operate it forever.

This entry was posted in Our Philosophy and tagged Urban Infill, mixed use, construction, operations cost, real estate

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“Third Thursdays” turns to Milhaus

Posted on July 12, 2010 by Milhaus Development

Check out the IndyStar’s article yesterday highlighting downtown living with quotes from Milhaus; here is a link. Every “third thursday” of the month, Indianapolis Downtown Inc. offers a chance to tour different downtown properties to get a glimpse of what it’s like to live downtown Indianapolis. The evening ends with a reception at a different restaurant each month. This week its the Rathskeller. For a complete list of buildings that will be open and more details, you can visit IDI’s website here. See you there.

This entry was posted in Lifestyle and tagged mixed use, Indianapolis, downtown living, IDI

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High speed rail coming to a city near you?

Posted on July 07, 2010 by David Leazenby

mixed-use-high-speed-rail The US Conference of Mayors recently produced a report entitled, “The Economic Impacts of High Speed Rail on Cities and their Metropolitan Areas.” There are four cities slated to be the hub of this multi-billion dollar investment that will alter the way Americans move about regionally for both business and recreation. Los Angeles, Chicago, Orlando, and Albany all represent different sized cities in different parts of the country. However, all of them are projected to benefit in similar fashion including jobs, tourism, new development, new businesses, and reduced congestion on highways and at airports. New high speed rail lines will radiate to millions of people, creating nearly 150,000 new jobs and $7.8B in new wages. By 2035 it is estimated that there will be $765M in new spending in the hub cities alone. What is the first reason the Mayor’s want the rail hub in their city? The report cites high-density, mixed-use development at train stations as the best driver of new economic activity. If the plan is implemented, the station area development alone at Albany could support 2,000 jobs; Chicago, 5,000 jobs; Orlando, 10,000 jobs; and Los Angeles, 10,000 jobs. You can see more at this High Speed Rail page from the US Conference of Mayors. You can also learn more about the vision of high speed rail in America at the Department of Transportation.

This entry was posted in Transportation and tagged mixed use, TOD, transit oriented development

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Car Size Matters

Posted on July 01, 2010 by Milhaus Development

mixed-use-smart-car-300x225 The ultimate urban infill and mixed use dilemma: even if a site has access to transit or is located within walking distance of jobs and services, buyers and renters still bring a car or two with them to their new home. The amount of parking that can fit on an individual site limits the design and feasibility of nearly every project. So, we are exploring some new ideas. Here are a few dimensions to consider:

Smart Car - 5.1’ wide - 8.8’ long
Mini Cooper - 5.5’ wide - 12.1’ long
Honda Accord - 6’ wide - 16’ long
Chevy Tahoe - 6.5’ wide - 16.8’ long

Most parking spaces are 10’ x 20’ and can fit two Smart Cars very easily, leaving almost 5’ of space remaining along the edges. Now this really only works for the spaces on the edge of an aisle when the driver can get perpendicular access to the space. However, if you could start designing parking lots and garages for smaller cars and arranging spaces differently; then you could really pick up some efficiency. You can actually fit 3 cars in that same 10’ x 20’ space.

Every space saved is significant. An affordable above ground parking garage costs between $13,000 and $20,000 per space, and an underground space costs between $22,000 and $35,000 per space. If you can double or triple the amount of parking in that same structure, then you could dramatically increase the number of units, or maybe you just make a project feasible, or maybe you could do away with the sea of parking around the mall. The possibilities are endless. You could also reduce the size of drive lanes and entrances, thus further reducing costs. We think its time to start thinking about designing places for the way that people really want to access them. We need to provide a many options. That includes walking, biking, transit, normal size cars, and now smaller cars.

This entry was posted in Our Philosophy and tagged mixed use, design, parking garage, parking lot, smart cars

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Live, Work, Play and Help the Environment

Posted on June 30, 2010 by Tadd Miller

mixed-use-land-use-driving The Urban Land Institute (“ULI”) released a report last week that shows the importance of Mixed Use and Urban Infill on the potential for long term sustainability within the US. Confirming what Milhaus has always found a logical conclusion from opinion based theory, ULI has now substantiated that urban infill and mixed use projects and/or communities where people can work, play, and shop closer to home, actually produce less traffic loads, thus lowering energy consumption and greenhouse gas emissions. You should check out ULI’s report, Land Use and Driving available for members on their website www.uli.org, or click on the following link.

This entry was posted in Sustainability, Transportation and tagged ULI, Urban Infill, mixed use, mixed use development

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Developing in transitional areas

Posted on June 29, 2010 by David Leazenby

mixed-use-monon-main-300x225 Mixing uses vertically in a project is difficult to execute in any market. It’s virtually impossible in a market with residential rents under $1.25/sf. If your residential demand outweighs your commercial demand, then you may have a situation with commercial space sitting vacant underneath full apartments. Then it won’t be long before you risk empty apartments, too. If the residential use is condominiums, like in the image to the left, then it’s even more difficult. Condo owners and commercial tenants are like Mars and Venus. They need each other, but they do not naturally relate well. In this case, something to consider is a townhome type of residential product that includes very flexible space on the first floor in addition to flexible zoning for the entire structure. The buildings could be residential, retail or office. In this project in Carmel, Indiana; we designed the units under residential code, including all wood frame construction, 9’ ceilings, etc. However, the units are designed and zoned for multiple uses. Each unit includes two entrances to increase its flexibility. In the most common configuration, the space is a home office for the unit owner. In some cases, a business is operated by the owner on the first floor or even the second floor. Note that any owner can place signage on the front of the their unit. No matter how the buildings are used, there is a consistent architectural expression along the streetscape. The best location for this product is along one or two blocks in a small transitional area in between strong retail and residential areas. It fills the gap and provides options for buyers to go whichever direction the market takes them. The project architect can then make the appropriate transition with design instead of the uses deciding it.

This entry was posted in USA Midwest and tagged Urban Infill, mixed use, Milhaus, carmel indiana, monon and main, transitional development

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Passive housing

Posted on June 28, 2010 by Greg Martin

mixed-use-sun-300x223 While the focus on conserving energy seems mostly focused on renewable energy, there is another alternative that can also complement other sustainable practices. Passive housing design incorporates building orientation, window types, building materials, etc. to capture and store as much solar energy in homes as possible. A friend of mine, Melissa Baldridge, writes on her post, Live Outside the Box, on June 15, 2010, that energy costs are nearly zero for houses designed to be so tight that they joke “that you can heat them with a hair dryer.” It is an interesting read. In it she highlights the benefits that the Europeans are experiencing from housing standards which promote energy conservation. If we can figure out how to incorporate some of these techniques into mixed use and multi-family projects, then there could be substantial operational costs savings. Whether the tenants or the owners are saving money, there will be value created.