The Rising Demand for Mixed-Use CRE Developments in Southern California (2026 & Beyond)
- gloryanng8
- Dec 30, 2025
- 4 min read
Mixed-use developments — properties combining residential, retail, office, entertainment, or hospitality — are becoming one of the most desirable and resilient commercial real estate investment types in Southern California.
As tenant expectations shift toward convenience, walkability, and experience-driven environments, mixed-use properties create vibrant communities that attract long-term tenants and stable revenue streams.
This guide explains the structural forces driving mixed-use demand in 2026, what features tenants prioritize, and how investors can capitalize on this fast-growing segment.
Why Mixed-Use Developments Are Booming in 2026
Southern California’s demographic and economic changes are fueling demand for live-work-play environments. The factors include:
✔ Limited space for new single-use development
✔ High consumer interest in convenience
✔ Reduced commute preferences
✔ Hybrid work lifestyles
✔ Steady demand for experiential retail
✔ Stable residential occupancy that supports surrounding businesses
Learn more about mixed-use success:👉 Why Mixed-Use Properties Are the Future of Commercial Real Estate
Trend 1 — Walkability Is Now a Top Tenant Priority
Modern tenants value walkability more than ever. This includes easy access to:
✔ Coffee shops
✔ Grocery stores
✔ Fitness studios
✔ Restaurants & nightlife
✔ Public transit
✔ Outdoor gathering spaces
Mixed-use layouts deliver this seamlessly.
Trend 2 — Retail + Residential Integration Strengthens Asset Performance
Retail tenants within mixed-use projects often experience:
✔ Higher foot traffic
✔ Improved brand visibility
✔ Stronger customer loyalty
✔ Consistent daily demand from residents
This reduces the risk of retail vacancy and increases rent stability.
Explore retail leasing shifts:👉 The Rising Importance of Strategic Retail Leasing in Los Angeles
Trend 3 — Tenants Prefer Amenity-Rich Communities
2026 tenants expect:
✔ Fitness centers
✔ Rooftop lounges
✔ Co-working spaces
✔ Modern lobby design
✔ High-speed connectivity
✔ EV charging stations
✔ Pet-friendly amenities
These features attract long-term residents and premium commercial tenants.
Trend 4 — Hybrid Work Makes Mixed-Use Even More Attractive
With hybrid work here to stay, tenants want:
✔ High-quality residential units
✔ Nearby places to work remotely
✔ Co-working and private meeting rooms
✔ Casual dining options for daytime work
Mixed-use buildings satisfy these new work patterns effortlessly.
Trend 5 — Mixed-Use Reduces Investment Risk
Mixed-use CRE is more resilient than single-use properties because it provides:
✔ Built-in cross-traffic between uses
✔ Multiple revenue streams
✔ Lower vacancy volatility
✔ Greater long-term value appreciation
✔ Strong tenant retention
When one sector softens, others help maintain cash flow.
Learn about property management strategies that enhance ROI:👉 Property Management Essentials: How to Maximize ROI
Trend 6 — Strong Demand in the South Bay and Coastal Markets
Southern California markets leading mixed-use demand include:
✔ Torrance
✔ El Segundo
✔ Manhattan Beach
✔ Redondo Beach
✔ Long Beach
Businesses and residents flock to these areas for lifestyle convenience and business accessibility.
Explore specific markets:👉 Torrance Property Management👉 Manhattan Beach Property Management
Trend 7 — Retail Tenants Prefer Mixed-Use Over Standalone Shops
More retail tenants are choosing mixed-use because:
✔ Built-in exposure
✔ Consistent day-and-night foot traffic
✔ Diverse demographics on-site
✔ Better energy and visibility
Retailers that perform especially well in mixed-use:
Coffee & cafés
Wellness and fitness
Self-care services
Medical retail
Specialty dining
Learn why visibility matters:👉 How to Choose the Right Retail Space for Your Business
Trend 8 — Local Cities Encouraging Mixed-Use Zoning
To battle housing shortages and reduce commute congestion, many municipalities are embracing mixed-use zoning reforms.
This leads to:
✔ Faster approvals in certain districts
✔ Incentives for redevelopment
✔ More transit-oriented development opportunities
This supportive environment accelerates mixed-use growth.
Trend 9 — Long-Term Tenant Retention Is Higher in Mixed-Use Properties
Mixed-use developments create communities — making tenants more likely to stay long-term.
Residents stay because:
✔ Lifestyle convenience✔ Walkability✔ Social engagement
Businesses stay because:
✔ High daily traffic✔ Stable customer base✔ Easy accessibility
Trend 10 — Investors Favor Mixed-Use for Stability and Appreciation
Investors receive long-term advantages:
✔ Higher occupancy
✔ Premium rents
✔ Strong cap rate performance
✔ Future-proof asset diversification
Mixed-use is projected to outperform standalone retail and office assets through 2030.
Risks Investors Should Watch For
Even with strong potential, investors must remain aware of:
❗ Higher initial development costs
❗ Complex permitting and zoning
❗ Parking and traffic requirements
❗ Difficulties coordinating multiple tenant types
❗ Stricter municipal design standards
These risks can be mitigated through strategic planning, strong property management, and tenant coordination.
FAQs
1. Why are mixed-use properties popular in 2026?
They meet tenant demand for walkability, convenience, and integrated living.
2. Are mixed-use developments safer investments?
Often yes — because they offer multiple income streams and lower vacancy risk.
3. What types of tenants thrive in mixed-use buildings?
Cafés, medical retail, fitness, co-working, boutique services, and lifestyle brands.
4. What cities have the strongest mixed-use momentum?
Torrance, El Segundo, Manhattan Beach, and Long Beach.
5. Are mixed-use buildings more expensive to develop?
Yes, but they typically produce higher long-term value.
6. How do mixed-use properties support tenant retention?
By creating a connected community with amenities, convenience, and lifestyle benefits.
7. Are zoning rules favorable for mixed-use in 2026?
Many Southern California cities are increasingly supportive, especially in transit-oriented districts.
Invest Confidently in Mixed-Use CRE With RPM Commercial
Mixed-use commercial real estate offers some of the strongest long-term potential in Southern California. RPM Commercial helps investors, owners, and developers navigate zoning, leasing, management, and strategic planning for high-performing mixed-use assets.
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