New development has slowed considerably across the U.S., but one segment of the commercial real estate market is gaining ground: lifestyle districts. 

From historic main streets to master-planned downtowns and innovation districts, lifestyle districts are areas where the built environment is designed around modern living. They put an array of retail, dining, office, hotel and residential options at the user’s fingertips.

But unlike traditional mixed-use assets, a lifestyle district goes one step further.

“Areas that rise to the level of a true lifestyle district are defined by scale and placemaking identity,” said Jacob Rowden, director of research at JLL. “They must reach a critical mass to begin to create closed-loop economies, and there needs to be differentiating factors that act as a magnet to draw people in.”

As it stands, the more than 1B SF of current lifestyle assets equate to about 5% of the national real estate stock, according to a June research report from JLL. By the end of the 2030s, this footprint could grow by up to 50%. 

That’s not all. Two-thirds of people expect the places where they spend their time to be highly amenitized, with nearly 70% willing to spend extra to have everything they need in one place.

But why are lifestyle districts becoming so popular? And why are people willing to pay a premium to be in them?

The answer is rooted in evolving expectations around convenience, experience and how people want to spend their time, Rowden said. 

“When you have an area that delivers higher-quality experiences and minimizes the friction of transitioning from activity to activity, you get demand clustering in those areas,” he said. “This is driving premiums.”

Why Lifestyle Districts Outperform Other Assets

In nature, life tends to cluster around places with resources that support well-being. Real estate is no different, Rowden said.

People naturally gravitate toward places that feel high-quality and have an abundance of amenities, and that demand translates into performance premiums.  

Office assets in lifestyle districts typically see a 38% rent premium, as well as a 3.8% occupancy premium. Multifamily sees a 48% rent premium, with a 1% occupancy premium. Retail and hospitality assets see a 46% and 45% rent premium, as well as a 0.6% and 3.3% occupancy premium, respectively.

“The more these projects can approximate the natural environment in a contained ecosystem with the end user informing design and need, the more people will covet the spaces,” said Sean McNamara, managing director, mixed-use property management at JLL. 

That ecosystem becomes particularly powerful when people can easily move between different uses. For example, an office worker can grab lunch at a nearby restaurant without having to jump in their car. A shopper is more likely to stop by a restaurant, and vice versa, McNamara said. 

This constant movement between uses leads to more frequent visits, longer dwell times and stronger overall demand — with retail being the “connective tissue” that creates the identity of the development and perpetuates demand, he said. 

“Retail is arguably the most important piece of most developments for establishing identity, because it’s the initial touchpoint where most people will experience the district,” Rowden said. “Every resident, worker or visitor who utilizes the district will have a high probability of engaging with retail spaces in some form.”

Halcyon Days

The proof is in the numbers. Lifestyle districts in primary markets that prioritized retail within their development saw three times more foot traffic, per JLL’s Lifestyle Districts 2026 report. In secondary markets, this number rose to five times as many visitors, as opposed to districts that didn’t go all in on retail as a central focus of their developments. 

At Halcyon in Alpharetta, Georgia, a $370M, 135-acre mixed-use development managed by JLL, retail has been a major driver of its success.

Halcyon sees nearly 2 million visitors every year and is regarded as one of the Atlanta area’s premier lifestyle destinations. This didn’t happen quickly — or easily. 

The JLL team worked to forge a distinct brand identity and placemaking strategy with retail as a core component. To do this, they conducted market research into the exact needs and wishes of this market: What were patrons in Alpharetta and the surrounding area really looking for? Which retailers would they like to see? Who would be the target audience? What vibe did the community want in their backyard? 

The team ultimately decided on a blend of nearly 40 retailers, both local and nationally recognizable brands, as well as 20-plus vibrant restaurant concepts such as local favorite Cherry Street Brewpub. 

Since its debut in 2019, Halcyon has become a “tremendous” part of the community, McNamara said. 

“Owners should evaluate retail tenants based on placemaking value, not solely on the rent they generate,” he said. “With Halcyon, we wanted to create something that the community would like to spend their time at. That is what a successful lifestyle district looks like to us.” 

In addition to its retail and commercial component, the development features nearly 500 multifamily units, dozens of single-family homes and townhomes, and two hotels. 

Property Management Creates The Ecosystem

Achieving the right tenant mix is only one aspect of the equation. For a lifestyle district to function as a true destination, operational cohesion is essential, McNamara said.

“Property management is central to creating that harmony by establishing the overall service ethos and creating cohesion between the project stakeholders,” he said. “It’s also responsible for marketing the project to end users, placemaking and measuring the effectiveness of programming to continuously improve the neighborhood.”

McNamara said the goal is to manage the district as a single experience rather than a collection of individual assets. 

This requires coordination across every aspect of the district: programming and events, districtwide marketing and branding initiatives, as well as maintaining public spaces, visitor flow and top-notch service standards. Daily operations help ensure that the district functions consistently across all uses. 

What it boils down to, McNamara said, is creating a unique brand identity with one voice, one calendar and one metric to measure across that entire property — all to create a seamless consumer journey, regardless of what segment of the market they may make up. 

A common pitfall in these developments is siloed management, where different parties act as isolated units, not communicating often or clearly enough to create that seamless experience. 

Given that properties often have an array of owners and stakeholders, siloed management causes a property to struggle, McNamara said. 

“The management priorities in any lifestyle district should seek to achieve proportional equity deference, to ensure that consideration is distributed proportionally across every retailer, operator and owner within the development,” he said. “This can be challenging, as stakeholders are not always aligned.” 

Certain types of properties in the lifestyle district segment are more operationally complex than others, such as sports-and-entertainment-anchored projects, McNamara said. He pointed to OCVibe, a $4B, 100-acre mixed-use development in Anaheim, California, as an example. 

Built around Honda Center, an indoor sports arena that's home to the Anaheim Ducks, this development stretches beyond the bounds of a typical mixed-use development or lifestyle district, both in terms of amenities and size. 

With its first phase expected to open in 2027, the property will feature 35-plus restaurants, entertainment and nightlife venues; 25,000 seats across four entertainment venues; 20 acres of outdoor space; more than 550 hotel rooms; and a combined 610K SF of office and retail space.

The venue-driven and transactional nature of sports-and-entertainment-anchored projects is difficult to combine with traditional CRE asset classes like office, residential and retail, McNamara said. It demands an understanding of the unique nature of venue operations and a mix of traditional CRE models. 

As a result, property management teams should create a deferential operating platform around the project’s shared facilities. This requires elevated thinking, a use and benefit study, and an approach that is as much an art as it is a science, he said.

“Getting stakeholders aligned around a clear project identity and vision, while giving management enough autonomy to operate, is not an easy task but nonetheless extremely crucial to the health and vitality of a project,” McNamara said. 

What Makes A District Succeed

When stakeholders align around a shared vision and operating framework, every aspect of the development is better positioned to reinforce one another, McNamara said. That coordination helps create a closed-loop effect throughout the entire district, resulting in more activity, spending and dwell time within the development — the ultimate goal of any successful lifestyle district. 

They often fail when one critical component is scaled down, delayed or scrapped, undermining the others.

For instance, if the entertainment or sports anchor underperforms, it fails to generate the event-driven occupancy spikes for a district’s hospitality component. If the multifamily piece gets scaled down, the lower residential density might translate into not enough customers for the district’s restaurants. If retail is removed or delayed in opening, it can make an area feel lifeless, acting as a disincentive to dwell time. Parks and other public spaces that are poorly maintained also have a strong disincentive effect.

But when all the components work, the traditional commercial real estate verticals, office and multifamily especially, benefit.

The problem is that many common issues can arise that block these benefits from ever being realized, Rowden said.

“These projects are very large and complex and require many years of permitting, approvals, securing financing and other steps before construction can take place,” he said. “Disruptions can occur at every stage of preplanning through to maturation.”

For example, the 2022-2023 rising interest rate environment upended property values and disrupted the conventional wisdom about demand for some key property types. This led to delays of critical construction components, Rowden said.

For other projects, the challenge is simply a lack of vision and scale at inception.

“Not achieving the right degree of scale or establishing that placemaking identity can lead to less successful developments or developments that take much longer to reach maturity,” Rowden said. 

Adapting Strategy To Ownership And District Type

When it comes to lifestyle districts, the advantages of single ownership — including economies of scale and easier and faster decision-making — are difficult to understate, Rowden said.

“A single landscaping contract for one acre of outdoor green space costs less than four separate landscaping contracts for a quarter acre each,” he said. “Across line items, like security and janitorial services or parking, there are similar practical savings that occur.”

According to JLL, lifestyle districts’ economies of scale reduce operating costs overall by 10%. When broken down into individual categories, line items such as security saw a 24% cost reduction when under single ownership, and insurance and maintenance saw 13% and 12% reductions, respectively.  

Achieving a similar level of efficiency in multi-owner districts requires an extra layer of planning and coordination and stronger governance, McNamara said.

If new owners are introduced when components of a lifestyle district are sold, these new owners need to be evaluated for their operational competence to ensure management, leasing and marketing are maintained in concert with the remainder of the district.

“In a multistakeholder lifestyle district, property management is uniquely challenged,” McNamara said. “That’s why it’s critical to create robust governance standards and placemaking and general policies to ensure all stakeholders have a voice.”

This takes time and thoughtful execution, but it can compensate for the lack of a single visionary decision-maker.

Establishing a project’s identity and gaining stakeholder alignment are only possible when all parties have buy-in, McNamara said.

“It’s akin to a RACI model, where everyone knows their role in the framework,” he said. “Everyone knows who is responsible, who is accountable, who is consulted and who is informed.”

Even established, mature lifestyle districts require active management, McNamara added.

“The behaviors and tastes of end users change over time,” he said.

Continued project success depends on management’s recognition of this reality and readiness to recalculate, based on the data, and to continuously curate and improve the neighborhood.  

“Establishing a district’s identity and placemaking vision never really ends. It’s an ongoing mission,” McNamara said. “That’s what earns end-user loyalty.”

It is critical that the property management and merchandising team understands the right mix of retail, informed by a placemaking vision over simple deal economics.

That’s because attempts to maximize the income of every building harm lifestyle districts, while curation that extends dwell time tends to maximize the performance of every component of a district, including each asset, over time.

Creating, and then not deviating from, the best retail merchandising strategy can be the difference between a successful project and a failed one. 

“In-house merchandising teams — whose compensation is not entirely transactionally determined — tend to be a better fit for lifestyle districts,” McNamara said. “They are better aligned with ownership and with a project itself than the traditional broker model and mentality.”

For example, The Plaza Coral Gables features an array of property types and asset classes about 5 miles from downtown Miami, but its retail strategy stands out.

The $700M development, finished in 2022, stretches across three city blocks. It features 160K SF of retail space, two Class-A office towers, nearly 200 luxury residences and the 4.5-star Loews Coral Gables Hotel. Built by Agave Holdings LLC, this development transformed a partially defunct area of the city into one of the area’s hottest places to work, live and play, McNamara said.

With Coral Gables being one of the most affluent communities in the Miami-Dade region, the property's retail strategy could not afford to miss — or the entire development would risk underperformance. 

As a result, rather than signing leases on a first-come, first-served basis, management and ownership teams curated the tenant mix to meet the needs and desires of the surrounding area. 

Under this boutique approach to leasing, premier tenants such as the award-winning Peruvian restaurant CVI.CHE 105, Brazilian steakhouse Fogo de Chão, and fitness centers like CorePower Yoga and R3 have all signed lease agreements. 

Rowden said this approach will also help The Plaza Coral Gables and other lifestyle districts continue to buck current CRE development trends.

This article was produced in collaboration between JLL and Studio B. Bisnow news staff was not involved in the production of this content. 

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.