Retail Space A Challenge For Many New Mixed-Use Developments

" The Cityville apartments just east of Parkland Hospital offer more than 260 new rental units in a row of brightly colored buildings.

One look at the parking garage shows that the apartments have leased well.

But so far, not much is going on with the ground-floor retail space. Only one space, containing a small sandwich shop, is occupied in the 42,000-square-foot strip along Medical District Drive.

Developers are hoping that retail business will pick up in the project when the DART rail station opens across the street in 2010.

Such mixed-use developments with shops and apartments are all the rage with developers.

Although the apartments have been a hit, somebody forgot to check with the shopkeepers. And some of these projects – like the one on Medical District Drive – have been slow to lease.

That doesn't surprise apartment analyst Greg Willett.

"It's a good concept, but it hasn't always come together the way people thought it would," said Mr. Willett, vice president of research with Carrollton-based M/PF YieldStar. "Multifamily developers don't necessarily know how to do retail correctly."

Often it's not the developer but city officials who want to include shops in apartment complexes. The cities want the sales taxes generated by retail, he said.

And sometimes it's easier to get a mixed-use development zoned than stand-alone apartment projects, industry consultants and builders say."