Land Development Today - July/August 2007 - (Page 31)

MIXED-USE Adding Office Space to the Mix Growing demand for office space is key component to some urban mixed-use projects. By Richard Westlund When Yizhak Toledano, Chief Executive Officer of Sky Development Inc., began planning a major mixed-use project for downtown Orlando (Florida), he knew that the office component would be critical to its overall success. “Today, people want to live very close to work,” said Toledano in a recent interview. “It’s essential for developers in urban locations to offer a complete package that includes office space and retail services, along with residential units. With this mixed-use concept, a resident can ride the elevator to the ground floor for a cup of coffee, then go right back up to work without ever needing a vehicle.” In urban markets across the nation, mixed-use developers are placing an increasing emphasis on office space – especially with the national slowdown in residential sales. In states like Florida, California, Nevada and New York, developers are bringing new commercial space to market as quickly as possible. “We’ve seen a major shift across the country in the last 24 months because the pent-up demand for office space is so big,” Toledano said. “In urban markets where land is a scarce resource, mixed-use projects with substantial amounts of office space are doing quite well.” However, developers are using highly varied strategies in designing and marketing their office spaces. Some projects offer office condominium spaces that have a particular appeal to a development’s residential owners. Other projects cater to corporations and large firms that prefer to lease one or more floors. And a third approach is to include an executive business center with office suites that cater to individual entrepreneurs or professionals. “Developers need to look very carefully at the economics of each individual market when considering the issue of office ownership or leasing,” said Lewis M. Goodkin, President of Goodkin Consulting. “There are many factors that go into the decision to buy or lease, and ignoring the economics is an invitation for disaster.” The European Cl ub is a proposed 30-story luxury mixed-us e project in Hal landale Beach, FL (Cou rtesy V-Strategic Group, LLC). Florida: A Trend-Setting State Nowhere is the trend toward urban mixed-use developments greater than in Florida, which continues to enjoy strong population and job growth. At the same time, land suitable for new development is very limited, especially in prime built-out locations. As a result, developers are turning to mixed-use concepts in leading markets like Orlando, St. Petersburg, and South Florida. One of the largest is Skycity, Sky Development’s $300 million downtown Orlando project, which includes an office tower and a hotel/residential tower on a 2.97-acre site. Because local market conditions currently favor commercial over residential uses, Toledano says the project’s first phase will be Sky Tower I, a 25story, Class-A office tower with 515,000 square feet of leasable space, along with ground floor retail. Sky Tower II will be a 35-story, 350-room hotel beneath 120 luxury residential units and ground level retail space. “We are responding to the Orlando market’s need for attractive new space with all the right amenities,” said Toledano, who adds that the project’s strategic location near the new Orange County Court House and rapid transit LYNX station will be critical factors in attracting tenants. “Skycity is the first mixed-use project of this magnitude in the downtown area,” he said. “Its location directly facing I-4 will give it unobstructed visibility from one of Florida’s most traveled arteries, rendering it a landmark gateway to downtown.” Sky Development’s Skycity – featuring Sky Tower I and Sky Tower II – will a $300 million Orlando development with offices, hotel, and residential components. www.LandDevelopmentToday.com 31 http://www.LandDevelopmentToday.com

Table of Contents Feed for the Digital Edition of Land Development Today - July/August 2007

Cover Contents Our Voice: Industry Advocates Your Voice: Reader Response Cover Story: Preparing Your Tax Strategy The Rules of the Game Historical Redevelopment Project Profile: Seattle’s High Point Retention: From Ravine to Road Land Use: Picatinny Arsenal Mixed Use: Florida Offices Industry News Products/Services Showcase Classifieds Recommended Reading Advertiser Index Editorial Board The Last Word: What? Me Plan… Urban Development

Land Development Today - July/August 2007

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