A unique sub-sect of commercial real estate, mixed-use properties are hybrid buildings that provide investors with a wide range of opportunities for shaping and optimizing their asset. 

As a city with vibrant retail strips, entertainment districts, and historic neighbourhoods, Toronto boasts an abundance of mixed-use properties. This volume makes them an important category of commercial real estate for investors to familiarize themselves with.

This post will analyze the distinctive characteristics of mixed-use properties, their advantages, and how investors can capitalize on Toronto’s commercial and residential rental markets for an exceptional return on investment.

Eager to explore available mixed-use properties in Toronto? Click here to access our exclusive listings. 

What Constitutes ‘Mixed-Use’? 

As the name suggests, mixed-use properties are buildings that serve more than one purpose – typically combining residential and business usage. A fairly common and easily recognizable example of mixed-use properties are buildings that feature street-level storefronts or business spaces, with dedicated residential apartments located above, below, or to the rear of the commercial space. 

In addition to the infrastructure, design, and layout of the property itself, mixed-use is also dictated by zoning. Across Toronto’s vast and diverse commercial real estate landscape, zoning bylaws control and regulate how properties may be used.

Not all commercial properties can legally contain a residential unit, and most residential properties may only be used as dwellings. However, properties that are zoned for commercial mixed-use are permitted to operate as a business, residence, or both. Neighbourhoods such as The Junction, Little Portugal, Parkdale, and Kensington Market are well-known for their abundance of mixed-use properties, where residents live in harmony with local businesses. 

Want to know more about how zoning impacts investors and commercial real estate in Toronto? Explore these posts from our blog. 

Advantages For Investors 

The hybrid nature of mixed-use properties provides investors with a wide range of possibilities. Beyond demanding top-of-market rents from both residential and commercial tenants, many mixed-use properties also boast strong potential for future redevelopment. 

Note: Although mixed-use properties can be partially or completely used as a residence, buildings of this nature are more intricate than traditional residential real estate. If you’re considering investing in a mixed-use property, you’ll want to partner with an experienced industry specialist who understands the distinct complexities of commercial real estate. 

Commercial Investment Potential

As Canada’s economic core, the city’s commercial real estate market is constantly growing and evolving. Home to countless entrepreneurs, small businesses, franchises, large-scale corporations, and non-profit groups, Toronto’s commercial real estate landscape is active, competitive, and full of opportunities. 

For investors, mixed-use properties provide a unique avenue for capitalizing on the city’s rapidly intensifying commercial corridors. Similar to residential real estate, properties with commercial potential are in exceedingly high demand. Today, commercial landlords are securing impressive returns in the form of rental income. 

Looking for more institutional-quality resources to empower your investment? Check out these other pages on our website. 

Residential Market Advantages

In addition to their commercial market potential, mixed-use properties also allow investors to tap into Toronto’s red-hot residential rental market. With record high demand for rental housing across the Greater Toronto Area, residential property owners are securing more profitable returns than ever before. This demand, along with projections of future population growth in Ontario make mixed-use a relatively low-risk venture for investors. 

Personal Use of Property

Finally, one of the most unique opportunities provided by mixed-use properties is their flexibility for personal use. With multiple spaces in one building, owner-operators can use certain areas of the property for obtaining income, and other areas for non-investment purposes if they so choose. 

For instance, if you purchase a property that features a ground-floor restaurant space with an apartment on top, you could live in the apartment unit while renting out the business below to a tenant. For some small-scale investors, being able to live in the same building as their investment can make certain landlord duties such as property or tenant management easier or less stressful. 

Searching for the perfect investment opportunity? Our team can help you find it. Send me an email or call me at 416.930.3890 to discover how our expertise can work for you.

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