Commercial Real Estate Terms #3: Digging into Development Projects

Welcome to the third edition of our commercial real estate (CRE) terms and definitions blog series! We are eager to explore several of the different types of development projects that exist within commercial real estate. There are more types of development projects than you may think!

Build-to-suit

Build-to-suit properties are incredibly easy to pick out in the Athens, Georgia area – from Panda Express in Hull to The Varsity in Watkinsville to Chick-Fil-A on Barnett Shoals Rd., they are everywhere around us. Usually contracted by the space’s tenant or occupant, these projects often occur because tenants cannot find a space that suits their needs. Also, if there are custom, unique features a tenant wants for their building, a build-to-suit development project may be the only way to accomplish their wishes.

Conversion

Conversion development projects, also known as adaptive reuse spaces, consist of a building that is converted from a previous or current use to another. An example of an adaptive reuse space in Athens is The Leathers Building. Formerly used as a factory warehouse near the railroad on Pulaski St., the building now houses commercial real estate offices for a variety of businesses, ranging from architecture, art galleries, dining, land planning, and more.

According to NAIOP, “space being converted is removed from current inventory and included in the under-construction category for the planned future use.” This means that you likely will not see an in-progress adaptive reuse project featured on an online listing.

Infill

Infill projects occur when improvements are made on empty are underutilized land in largely developed areas. An infill project can also be referred to as land recycling.

The Center for Creative Land Recycling defines land recycling as “the reuse of abandoned, vacant, or underused properties for redevelopment.” NAIOP specifies that “infill development is typically done in dense environments where land is scarce but may also occur in developed portions of rural areas.”

Some well-known examples of land recycling include Ghirardelli Square in San Francisco, California and The High Line in New York City.

Ghirardelli Square is known as the first successful adaptive reuse project in the United States. Following the sale of Ghirardelli’s chocolate manufacturing operation in the 1960s, San Francisco residents purchased Ghirardelli Square and converted it into a lively, vibrant shopping plaza for tourists and residents alike to gather at. The experience is unlike any other, combining retail, fine dining, and the charm of San Francisco.

The High Line in New York City dates back to the 1800s. During the mid-1800s, The High Line consisted of street-level train tracks that New York Central Railroad trains utilized to deliver food to lower Manhattan. With the decline in train use due to trucking, demolition of The High Line began in the 1960s, with all traffic ceasing by the 1980s. Instead of facing total demolition, The High Line now serves as a 1.45-mile-long greenway lined with florals, trees, and plants, offering a space of solace and nature in the concrete jungle to both residents and tourists.

Mixed-use Development

Mixed-use Development spaces feature a combination of multiple land uses, ranging from hospitality, office, residential, and retail facilities. These spaces are usually combined as a single project, and can be located either on a single site or adjacent sites in the same development.

General Time is an example of a mixed-use development in Athens that currently includes an anchor tenant, Terrapin Beer Company, and will house Wayfair‘s 45,000 square-foot customer care center. In the future, General Time hopes to introduce 250,000 square feet of mixed-use space, along with multifamily units, event space, and green space.

In larger cities such as Atlanta, Boston, Chicago, or New York, mixed-use development spaces can be found in skyscrapers or towers that have ground-level retail, housing, and other spaces. An example of a mixed-use skyscraper development is Central Park Tower, located in the Midtown West area of Manhattan. The tower features many luxury condos that have gorgeous views of Central Park, and Nordstrom‘s flagship store is also located within the tower, serving as an anchor tenant.

NAIOP says that “mixed-use development tends to increase walkability and has the potential to mitigate traffic.”

Are you interested in learning more about development opportunities that may be available near you? Our team at NAI Elrod Group would love to hear from you. We cannot wait to assist you in finding the perfect development opportunity best suited for your needs!