After a grueling day at the office, a resident stops on the ground floor of his apartment building to buy a sandwich, pick up his dry cleaning, and rent a DVD. Ah, life is good. But soon, his quiet night at home is interrupted by the smell of restaurant cooking, the sound of trash being tossed in the dumpster, and the glare of streetlamps from the main avenue below, a flood of light that regularly keeps him up at night.

These small details, such as the placement of lights and exhaust fans, may seem trivial when you're designing a mixed-use community. But developing this popular project type is anything but easy, and simple logistical errors can easily lead to this unfortunate scenario.

"It's not just a matter of having a retail store and plopping residential on top," says Cliff Goldstein, senior partner at Los Angeles-based J.H. Snyder Co., a real estate developer.

Trammell Crow's Alexan Reston Town Center in Reston, Va., offers 365 units of housing and 4,000 square feet of office and gallery space for a cultural arts group. The community is within walking distance of theaters, shops, and restaurants.
Trammell Crow's Alexan Reston Town Center in Reston, Va., offers 365 units of housing and 4,000 square feet of office and gallery space for a cultural arts group. The community is within walking distance of theaters, shops, and restaurants.

Merging residential, retail, and even office space within one site is challenging and takes months of planning and coordination.

Nevertheless, the potential challenges are not stopping developers. Mixed-use projects are sweeping the nation, and for good reason: The product type makes sense for all parties. The typical urban model–residential over commercial space–helps both retail and housing developers combat soaring land prices, gives residents the convenient lifestyle they crave, and helps cities revitalize blighted areas.

Much to the dismay of many developers, there isn't a set formula to create the perfect mixed-use project. Each location is unique and requires its own set of plans. "Unlike a garden [apartment] experience, where you take it down the road and build it again, these deals are one-off deals," says Chip Bay, senior managing director of Trammell Crow Residential's Mid-Atlantic region. "Once you figure out what you are doing and you build it, you're going to take those plans and you're probably going to throw them away. You'll never use them again."

But the more mixed-use you do, the better you'll understand how to put all the pieces together. Here are five steps to guide you through the process.