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One of the most frequent objections to New Urbanism, with its mixture of uses and building types, is that it is too complex.

During the 19th and early 20th centuries, mixing uses in the same building and on the same block was considered routine. Since WWII however due to changes in zoning, both the development and financial communities have grown accustomed to single use projects; office buildings, shopping centers, strip malls, subdivisions and apartment projects. The financial models for these specific development types are well defined and comprehensible to lender and developer alike and both have learned to specialize. Because of this specialization and because it does not fit into the defined “specialty box” finding financing for urban mixed use, projects is more difficult.

Building a mixed use mixed income community is more complex but that does not make it either unprofitable or unfinanceable, it just means we have to develop new mixed use tools and attitudes to be able to analyze and define our projects.

The right proforma model and format can make the absolute difference between success and failure. Mixed use buildings present their own unique set of challenges: differing types of income streams (i.e. for sale condos and retail leased space in one building), cost allocations and short term verses long term profit recognition all have implications for financing and lead to questions related to loan structure, CC&R’s and management, which differ from a typical single use model.

All too often, developers are required to develop their own financial models using programs such as Excel because there is no available model which specializes in mixed use development.

To remedy this situation, Urban Community Partners is collaborating with one of the industry leaders in Real Estate financial modeling, Real Projections inc. to develop a new financial model specifically targeted at mixed use buildings. This model will be able to be consolidated with other Real Projections software designed for Land development, home building and commercial development projects.

Our objective is to develop the new standard model for the industry which can be used by developers and lenders to evaluate projects and which will help remove one of the obstacles to financing mixed-use walkable urban development.