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Editor’s note: Some quotes in this story were originally spoken in Spanish and come via a live translation provided by the conference.
MEXICO CITY — The challenge of developing a successful mixed-used or master-planned development project is how to make sure every element of it succeeds in its own right while also contributing to the greater whole so two and two add up to more than four.
Speaking during the “Trends in Mixed-Use and Master-Planned Projects” session at HVS’ 2023 Mexico Hotel and Tourism Investment Conference, Israel Contreras, real estate investments director for Inmobilia, said it comes down to making sure the various business models operating within one development are benefiting each other.
“Each has to be sustainable by themselves, but you have to create an ecosystem to make each more profitable than they’d be if they were isolated,” he said. “They have to satisfy the demands of consumers. That sounds easy, but it’s a big challenge.”
Gary Greene, principal for Gary Greene Design, said it can just can be “individual buildings” close to each other, but there must be “a sense of place.”
“You’re creating a place people want to be, and if you do it right, it has different uses from residential to hotels to retail,” he said. “If you do it right, people who are there for one thing are drawn to another. You want each part to enhance each other.”
One reason that’s so challenging is success means serving the needs of consumers, the individual businesses and the overall project, panelists said.
“As a developer, at the end of the day, this is a financial business beyond creating communities,” Contreras said. “We need to maximize the return on investment and the land. … We’ve been in that situation where you have to sacrifice certain components that subsidize others. That’s a common situation, and at the end of the day, it’s about the combination that provides better profitability.”
Andrés Shapiro, business development manager in Latin America for Jerde, said that requires “clarity on financial goals” across the project.
Greene said no one solution will work for every project.
“Each project has its own ingredients,” he said. “You have a framework from past experience, but that evolves over time.”
Greene added the community building aspect comes together differently depending on the setting. For example, urban developments must create some sort of natural aspect that makes the project a more appealing place to be.
Shapiro agreed, adding his company’s projects are “anchored by quality of life.”
Key considerations include “convenience, walkability and if you have scale that makes sense on a human-level so spaces are comfortable with public amenities,” he said.
Mauricio De Font-Réaulx, director general of Centro Cultural Universitario, agreed it’s a difficult needle to thread, but the benefits are strong enough to lift an entire market if executed correctly. He pointed to his company’s project in Guadalajara, Mexico, that has drawn in film production, including the animation of Guillermo del Toro’s “Pinocchio.” He said getting the hotel aspect right is important for connecting a project with the area that surrounds it.
“You have to try to find something that connects it in a relevant way with the community,” he said.
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