Fact or Fiction: Will the corporate real estate market merge with residential?
- Find out whether the growing trend in mixed-use developments could indicate a merger between the two real estate segments
As the market becomes increasingly influenced by trends such as hybrid work, mixed-use developments, residential buildings with coworking areas, and offices that incorporate concepts like biophilia and a home-like feeling, the line separating professional and personal experiences is becoming more blurred. This movement raises a central question for the industry: can residential and corporate real estate actually merge?
To understand whether these two models are moving toward a complementary relationship—absorbing and reusing positive attributes from one another—or whether we are facing a possible structural merger between the segments, as well as to assess the real benefits of mixed-use assets, REsource interviewed Fernanda Rosalem, Head of Investments at Paladin Realty Partners.
Is a merger a reality?
In the executive’s view, the idea of a complete “merger” between the two segments is more provocative than literal. What is happening, she says, is a gradual convergence, marked by an exchange of attributes, without either typology losing its essential identity. “I don’t believe in a merger between residential and corporate. What exists is an approximation and an exchange of elements, but each one continues to have its function very clearly defined,” she states.
This movement is directly related to changes in the way we work. The advance of the hybrid model has shown that the office is no longer just a place of production, but also a space for interaction, culture, and the construction of corporate identity. “Hybrid work brought flexibility, not replacement. The office remains essential for culture, exchange, and learning,” explains Fernanda.
In this sense, the influence of residential on corporate real estate appears mainly in the search for more welcoming, human, and comfortable environments, while residential developments increasingly incorporate solutions typical of the corporate world, such as coworking areas, meeting rooms, and shared services.
Management challenges
Location remains decisive
Another determining factor for the success of this type of development continues to be location. For Fernanda, mixed-use only works consistently when it is inserted in neighborhoods that already have a naturally multifunctional dynamic. “In real estate, location is still the number one factor. That doesn’t change. You can only build a successful mixed-use building if it is in a neighborhood that is already multifunctional.”
These assets follow a different logic from large, traditional corporate office buildings. They are more boutique projects, with floor plates between 800 and 1,200 sqm and around 15,000 sqm of total area. “We are talking about law firms, family offices, asset managers, advertising agencies, companies that value signature architecture and differentiated projects. It’s not the profile of companies that occupy 5,000 sqm floors on Faria Lima,” she says. This is an audience that seeks exclusivity, strategic location, and a more personalized occupancy experience.
From an investment standpoint, Fernanda emphasizes that mixed-use, in itself, is not an automatic guarantee of greater resilience. “Resilience is not about being mixed-use or not. It’s about location and the quality of the asset.” According to her, the developments that performed best in the post-pandemic period were those that were well located and of high standard, regardless of typology.
Verdict
Even so, she acknowledges that this format is likely to gain more space in the market, although it should not become dominant. “Mixed-use will grow, but it will remain a strategic niche. It will not replace all other formats.”
In the end, the Fact or Fiction provocation finds a middle-ground answer: there is no structural merger between residential and corporate real estate, but rather an increasingly evident convergence. What is taking shape is a new way of thinking about real estate as part of a more integrated urban ecosystem, where working, living, and socializing do not need to exist in separate worlds—but also do not need to become a single one.
