MXU Development Breathes New Life Into Chicago’s Suburban Markets

November 5, 2021

Mixed-Use developments are growing in popularity in the Chicago suburban market because they appeal to consumers as well as investors. The rise in demand, especially during the COVID-19 pandemic, was driven in part by consumer’s desire to spread out in more suburban environments.

But even before the pandemic arrived, mixed-use (MXU) projects were rising in prominence because they aligned with market and demographic shifts toward live, work, play environments. MXU projects that incorporated a variety of retail, entertainment, restaurant, or services appeal to those living or working at the same site from a convenience and time-saving perspective, and those amenities nearby enhance their daily quality-of-life experience.

While mixed-use projects are more complex to develop, they add a broader spectrum of uses and accommodate longer portions of a visitor’s day – often spanning from dawn to midnight because the entertainment and dining habits of people continue to adapt. Creating that perfect balance in a MXU project requires a developer with a skill set that can reimagine, reinvent, and activate an asset with the right mix of uses ranging from office, retail, multifamily or medical, and may now even include last-mile industrial pick-up or drop-off points.

The best mixed-use environments consider the journey of the customer, the desire of residents or the needs of workers. Mixed-use projects must also be authentic experiences that create a connection and emotional appeal for each audience. None of those objectives are simple or easy to achieve individually, and when combined it requires a development team that is well versed in breathing life into projects. The integration of multiple property types into a holistic plan is complicated because the overall success hinges on each use playing of the other, enhancing other components of the project and bringing individual parts together for the greater good of the community – all in the right location.

Suburban communities often seek lower densities in projects than is found in urban cores. But MXU projects must also enhance a community character with new uses and revenue opportunities. Suburban settings can deliver quality of life elements but need to offer dynamic uses that appeal to both existing residents while pulling younger ones seeking amenities, they are accustomed to finding in urban cores.

Redevelopment is a thread that connects a number of the larger-scale MXU projects underway in suburban Chicago.

One such example of a mega-mixed-use-redevelopment on Chicago’s South Side is Bronzville Lakefront, a $3.8 billion project by GRIT on the former location of the Michael Reese Hospital and Medical Center. The initial phase of the project encompasses 13 acres that will be transformed between 2021 and 2026 into a thriving life science community, a mixed-use commercial, office, retail, and community space with a new park. The MXU project is planned to include seven million square feet of commercial, institutional, and mixed-income housing upon build-out.

Centennial, a Texas developer, is redeveloping two regional malls, Fox Valley in Aurora, and Hawthorn Mall in Vernon Hills, with residential components. The former Motorola campus in Schaumburg is being reinvisioned as a mixed-use project known as Viridian, while New Jersey-based Somerset Development has done the same thing, albeit on a somewhat smaller scale, with the former AT&T campus in Hoffman Estates. That site is now an office/retail complex known as Bell Works Chicagoland. Hines has also been redeveloping a very small portion of the former McDonald’s corporate campus in Oak Brook, though the main campus hasn’t been sold for development yet.

Then there’s Cantera, a large mixed-use district in Warrenville, which has been under development in phases for several years. The 500-acre-plus site, formerly a quarry, is seeing new residential uses being added by McShane Construction, which recently completed a 364-unit apartment complex for a development client there.

Each of these MXU projects must factor in site zoning, market demographics, city entitlements, land assemblage, amenities, and a host of other considerations when collaboratively constructing a plan that encompasses the perfect mix of uses. If done well, a MXU development can appeal to a larger customer base across a wider area because they can pull from several nearby suburban areas. That all adds up to mixed-use developments breathing new life into sites across Chicago’s suburban markets.

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