Real estate developers around the world are responding to increased consumer interest in cycling and walking as preferred modes of transportation by building projects adjacent to trails, bike paths, bike-sharing stations, and other infrastructure that supports human-powered mobility, according to a new ULI report.
Active Transportation and Real Estate: The Next Frontier identifies the latest phase in the evolution of urban development from car-centric to people-oriented design: “trail-oriented development” leverages investments in cycling and pedestrian infrastructure to offer car-free lifestyle and transportation choices to people seeking more physically active and environmentally sustainable modes of getting around.
The report explains that federal, state, and local public investments have largely been responsible for the creation and expansion of cycling and pedestrian infrastructure—and for the rapid rise in bicycling commuting, which increased by roughly 62 percent between 2000 and 2014, according to the U.S. Census Bureau. But private real estate development is making it possible for people to live, work, and shop close to these sought-after locations, providing access to and making further investments in active transportation infrastructure.
Written by ULI senior vice president Rachel MacCleery and ULI senior resident fellow Ed McMahon, Active Transportation was published as part of ULI’s Building Healthy Places Initiative and was made possible with support from the Colorado Health Foundation and the Randall Lewis Health Policy Fellowship Program.
Due to the rising popularity of walking and cycling for daily mobility, trail-oriented development presents a significant economic opportunity to the private sector. These projects are also producing positive fiscal impacts on local and regional economies. Real estate values of properties adjacent to walking and biking paths trails have increased—exponentially, in some cases, according to the report. In Indianapolis, for example, values of properties within a block of the Indianapolis Cultural Trail increased by 148 percent since the trail opened in 2008. Since opening in 2000, Minneapolis’s Midtown Greenway has catalyzed more than $750 million in new residential development.
In addition, cities and regions are taking note of improvements in quality of life, public health, and environmental outcomes due to the existence of active transportation infrastructure and the private real estate developments that are making these amenities a focal point.
Active Transportation illustrates its conclusions through case studies of ten trail-oriented development projects throughout the world. Common themes emerge among the profiled projects, among them:
- Trails, bike lanes, bike-sharing stations, and sidewalks add value to development projects.
- There exists a growing market for the inclusion of bike-friendly features in residential and commercial properties.
- Relatively small investments in bike-friendly amenities can lead to improved returns.
- A reciprocal relationship exists between the public and private sectors in terms of maximizing investments in active transportation.
- Active transportation infrastructure can catalyze real estate development; in fact, a correlation exists between access to this infrastructure and increased property values.
In a recent ULI members–only webinar on Active Transportation, developers of three projects profiled in the report discussed their work and the report’s major themes. In addition, the webinar touched upon five catalytic active infrastructure projects around the world that have led to enhanced property values, economic returns, and health and environmental outcomes.
MoZaic in Minneapolis Reconnects Neighborhood to the Midtown Greenway
Stuart Ackerberg, CEO of the Minneapolis-based Ackerberg Group, saw an opportunity for an office building in Uptown, a hip Minneapolis neighborhood with a solid restaurant and retail scene and growing housing supply, but little to offer to a daytime population. A surface parking lot adjacent to a major transit hub and the Midtown Greenway, a 5.5-mile (8.8 km) trail that connects popular city neighborhoods with the Chain of Lakes, became the perfect site for much-needed office development and a chance to reconnect the street to the greenway, located significantly below grade.
In 2012, the first phase of MoZaic, which includes 77,000 square feet (7,200 sq m) of offices, retail space, and parking, opened and is now 100 percent leased. Ackerberg attributes MoZaic’s success to its proximity to the greenway, which nearly 5,550 people use each day. To connect the site to the greenway and allow MoZaic’s tenants to take full advantage of this recreational amenity, Ackerberg Group built a bridge and ramp down to the greenway with a combination of its own funds and county grants, illustrating a key point in the report: relatively small investments in bike-friendly amenities can lead to improved returns.
The developer also built a public art park, featuring 19 unique pieces, within the MoZaic property. “What we wanted to create here is more of an ‘a-ha’ situation or an oasis so that when you come into this project, you have something amazing” to look at, Ackerberg said. MoZaic East, the second phase of the project, is expected to open in 2017.
Hassalo on Eighth Helps Advance Eco-District Goals
The number-one city in the United States for bicycle commuting, Portland, Oregon, made early investments in active transportation infrastructure from which the city continues to reap benefits. The city boasts 319 miles (513 km) of bikeways, which continue to be a magnet for a talented and highly educated workforce. Hassalo on Eighth, a trail-oriented, mixed-use development with ambitious sustainable features and goals, gives residents and office works quick access to protected bike lanes and to downtown Portland via transit services.
The project—composed of 657 residential units, roughly 58,000 square feet (5,400 sq m) of retail uses, and 271,600 square feet (25,200 sq m) of office space—also happens to be located within the Lloyd Eco-District, a neighborhood that has made a specific pledge to reduce waste, water, and energy consumption as well as expand access to car- and bike-sharing programs. Hassalo on Eighth holds the largest wastewater treatment facility on site of any residential property in the United States, according to Wade Lange, vice president and regional manager, Portland, for American Assets Trust, the project developer.
Hassalo on Eighth advances the goals of the eco-district while offering transportation options for the growing number of people in Portland who are opting for a car-free or “car-lite” lifestyle, Lange said. “What we’ve learned through our Hassalo development is that transportation matters,” he said. “The single most important reason people give for renting here is transportation options available to them.” The project also boasts the Lloyd Cycle Station, the largest bike facility in North America with a capacity to hold 1,200 bicycles. Showers, locker rooms, and a bike washing and repair facility are among the amenities that American Assets Trust hopes will continue to attract tenants to Hassalo on Eighth.
Circa Gives Easy Access to Indianapolis Cultural Trail
Even in cities with lower rates of bicycle commuting than Portland and Minneapolis and with residents who are reluctant to give up their personal vehicles, trail-oriented development is in demand, particularly when investments have been made toward catalytic active transportation infrastructure. The eight-mile (13 km) Indianapolis Cultural Trail has been a boon to real estate development in downtown Indianapolis, which, like other Midwest cities, is experiencing a renaissance and a renewed interest in urban living among residents.
Among these projects is Circa, a 264-unit multifamily and commercial development, which opened in 2014. Circa’s six buildings are located immediately adjacent to the trail, which connects shopping, art galleries, restaurants, and neighborhoods in downtown Indianapolis. Project developer Milhaus specializes in creating dynamic urban neighborhoods in 18-hour markets, said Jeremy Stephenson, president of Milhaus Development and Milhaus Construction. Located northeast of downtown Indianapolis, Circa is near the Massachusetts Avenue Cultural District.
“One of the things that is interesting about our particular development is the ability to think about how public and private investment can impact the development of the city,” Stephenson said. He credits the city of Indianapolis for having the foresight in the mid-2000s to establish the cultural trail within the downtown core; the trail opened in 2013. “With the recent opening of the cultural trail, we knew we wanted to connect immediately to that. It was a huge hit. Property values increased by about 150 percent and continue to grow.” Circa offers a suite of bike-related amenities, including a “maker’s room” or a bike repair room, bike storage, complimentary bike-sharing services, and a bike-washing station.
To learn more about trends in active transportation and understand the relationship between public investments in cycling and pedestrian infrastructure and private real estate development, go to uli.org/report/active-transportation-real-estate-next-frontier/.