Office Development in Mixed-use Settings: Raising the Bar in Suburbia

By: Jeff Berkes

Federal Realty Investment Trust shares lessons learned from developing office space in urban-style mixed-use projects.

WHEN FEDERAL REALTY Investment Trust broke ground on Santana Row in 2000, it set out on a bold mission to transform a drab suburban shopping center in San Jose, California, into a retail, entertainment and residential district boasting a robust urban character. Two years later, just after a huge fire destroyed part of the emerging project, restaurants and apartments as well as local and luxury retailers opened. A hotel, movie theater and condominiums were on the horizon. It appeared that the company was on its way to achieving its vision but for one hitch: Some 50,000 square feet of second-floor retail space had failed to elicit interest.

It turned out to be a worthwhile hiccup.

Federal Realty revamped the space and filled it with office users, and it wasn’t long before the office tenants began talking about how much they loved working at Santana Row, with its amenities and public spaces just a short stroll away. The developer originally hadn’t envisioned including offices in the project, but it retooled its plans to make room for more daytime users and opened a 65,000-square-foot office building amid the Great Recession in 2009. Despite the tough times, tenants filled it.

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