What's old in real estate development is suddenly brand new: Mixed-use development.

Time was when living above the store was commonplace in cities. That was before Americans' love affairs with cars propelled them to far-flung residential neighborhoods where they had to drive to get anywhere. In earlier days, people wanted close-knit, self-sustaining communities, where they could reside, work and play within short distances. But by the 1950s, the suburbs were in full bloom, and having a residence above a business place was déclassé.

Fast-forward to 2005 and witness the rebirth in a big way of mixed-use as a major tenet of New Urbanism which has been described as a revival of the lost art of creating a complete town. Individuals and families tired of suburban sprawl, not to mention volatile gas prices and supply, are choosing to live in high-density, high-convenience communities, where the grocery store is a short walk from home, and the office can be in the next building and there is a sense of place.

But mixed-use communities don't stop there. Hotels, civic centers, parks, police substations, hospitals, senior citizen homes and city halls are already part of these communities — or on the drawing boards for the many projects under development.

Retail REITs, from mall giant Simon Property Group to neighborhood and community center Equity One Inc., are considering ways to intensify their assets by adding multiple uses. Many are partnering with residential and commercial developers to merge property types in one development. A mixed-use project can have any combination of retail, residential, hotel and office. “We believe the addition of these uses makes our properties more attractive to retailers and shoppers,” says Raymond Sokolov, Simon president and COO.

The Urban Land Institute agrees. “Diversified income streams from a single property can be attractive,” making the concept appealing to investors and developers, according to the recently published ULI report, 2006 Emerging Trends in Real Estate. Moreover, “demographics, city planning and commuter preferences favor the trend,” the report states.

New Urbanism is more than just a fuzzy dream. Take a look at Atlanta's new Atlantic Station, for example (page 50). By the end of the year, the Atlanta project will have nearly 12 million square feet of offices, residences, hotels, retail, restaurants and entertainment venues, according to management firm Jones Lang LaSalle.

In another example, Lutgert Companies and The Barron Collier Companies are about to begin construction of The Mercato (page 52) in Naples, Fla., which will include up to 395,000 square feet of retail, 100,000 square feet of office space, 175 residential units and, possibly, a hotel.

These are not isolated examples. Mixed-use is here to stay, say architects and developers.

“Virtually every project we have worked on in the past year has had at least one other use beyond retail, with residential, office and hospitality as the most prevalent,” says Brett J. D. Kratzner, principal at architectural firm Dorsky Hodgson + Partners. “Because of this phenomenon of adding additional uses to retail, usually on top, we have become more attuned and adept at meshing disparate uses into one and making the two or three work as one.”