What a mixed-use property is, how it is financed and approved, and why it suits Colorado mountain towns, from Frisco to Grand Junction.
A mixed-use property is a building or complex that combines two or more uses, such as residential, retail, office and sometimes industrial. The most common form is a single building with shops on the ground floor and homes or offices above.
In Colorado mountain towns, mixed-use is central to new projects that pair commercial space with workforce housing. Upper-floor tenants can steady the income when ground-floor businesses slow in the off-season.
This post covers the types of mixed-use property, the projects shaping mountain towns, the benefits and downsides, financing and what to check before you buy. To see what is for sale now, browse mixed-use listings across Colorado.
Types of Mixed-Use Property
Vertical, horizontal and live-work are the main forms of mixed-use property, and vertical is the most common.
- Vertical: One building, with commercial or retail space below and residential space above.
- Horizontal: Different uses in neighboring buildings on one site.
- Live-work: Living space and workspace in the same unit.
- Destination: Residential space, hotels, retail and entertainment together in one development.
| Type | Typical mountain-town example | Main thing to check |
|---|---|---|
| Vertical | A main-street building with a shop below and two apartments above | Separate utilities, fire separation and access to upper floors |
| Horizontal | A retail pad and an apartment building on one parcel | Shared parking, easements and how the site could be split |
| Live-work | A unit with a workshop or studio at street level and a home behind or above | Whether zoning allows both uses in one unit |
| Destination | A hotel, restaurants and employee housing on one site | Phasing, financing and long approval timelines |
In Steamboat Springs, warehouse and live-work units led demand in early 2025, often fetching $350 to $400 or more per square foot downtown. RMCRE’s Steamboat Springs Q1 2025 update reported no live-work units for sale at all.
Mixed-Use Projects Shaping Colorado Mountain Towns
New mixed-use projects in Colorado’s mountain and Western Slope towns combine commercial space, hotels and employee housing.
| Project | Town | Mix | Status |
|---|---|---|---|
| Foote’s Rest | Frisco | $90.5 million; 108,000 square feet; 80-room Marriott Tribute hotel, five food and beverage concepts, an entertainment venue and employee housing | Broke ground December 2025 |
| The Terminal | Grand Junction | 100,000 square feet; 72 mixed-income homes, retail and arts space; replaces the old Greyhound station | Site preparation under way |
| Harvest Roaring Fork | Between Glenwood Springs and Carbondale | 1,500 homes, 55,000 square feet of commercial space and a 120-room hotel | Close to Garfield County approval |
The Roaring Fork Valley is still about 7,000 homes short, which is why housing is part of the mix.
Smaller projects follow the same pattern. RMCRE’s Steamboat Springs Q1 2026 update reported several new retail-with-condos-above developments going up downtown. In Pagosa Springs, the Q1 2026 update noted commercial activity in retail, mixed-use and office space.
Mixed-Use Signals by Town
| Town | Period | What RMCRE brokers reported |
|---|---|---|
| Durango | 2026 outlook | Mixed-use expected to command premium valuations because of diversification |
| Steamboat Springs | Q1 2026 | New retail with condos above going up downtown; cap rates 5.5% to 6% |
| Pagosa Springs | Q1 2026 | Notable mixed-use activity; core-area cap rates averaged roughly 6.7% |
| Pagosa Springs | 2025-2026 | Triple net rents on commercial property of $18 to $24 per square foot |
| Glenwood Springs | Q2 2026 | About 3,000 new residential doors in eight years with no matching office development |
| Grand Junction | First half 2026 | The Terminal under way; commercial cap rate 7.0% |
See the Pagosa Springs Q1 2026 market update and the Steamboat Springs Q1 2026 report for the full figures.
Why Mixed-Use Works in Mountain Towns
Mixed-use works in mountain towns because it spreads risk across tenants and seasons.
If ground-floor restaurant tenants struggle in the slower winter months, upper-floor office tenants keep the income stable. More than one type of tenant means a broader tenant market and less exposure to a single vacancy. Because of that diversification, mixed-use properties are expected to command premium valuations in Durango in 2026.
Mountain towns also have little flat, zoned land. Stacking homes over shops gets more use from a scarce lot, and towns short of workforce housing tend to favor projects that add it.
Upper-floor homes bring people downtown after shops close. That foot traffic supports the restaurants and stores below, which in turn makes the apartments easier to rent.
The Downsides of Mixed-Use Property
The downsides of mixed-use property are more rules, harder management and tougher financing.
- Complexity: Regulatory requirements can raise construction costs and lengthen timelines.
- Management: Balancing business and residential tenants, maintenance and disputes is harder.
- Financing: Some lenders see mixed-use as riskier because of zoning, valuation and market swings.
In mountain towns, workforce housing and short-term rental rules also shape what gets approved.
| Benefit | Matching risk |
|---|---|
| Two income streams | Two sets of laws: commercial leases and residential tenant law |
| Broader tenant market | Noise, smells and hours conflicts between uses |
| Premium valuations expected in some towns | Fewer comparable sales for appraisers |
| Workforce housing support | Deed restrictions that cap rents on some units |
| Steadier income across seasons | Higher maintenance on older main-street buildings |
How Mixed-Use Property Is Taxed in Colorado
Colorado taxes residential and commercial property at different assessment rates, so a mixed-use building can carry two rates.
For 2026, most commercial buildings are assessed at 25% of value. Residential property, including apartments, is assessed at 7.05% for school taxes and 6.8% for local government. Colorado assessors can classify a building as mixed-use and split its value between the two classes. The split usually follows how much of the building each use occupies. The owner may need to document which space is used for what.
The split makes a real difference to the tax bill. Ask the county assessor how a building is classified before you buy, and check that the split matches the building’s actual use.
How to Value a Mixed-Use Building
Value a mixed-use building by underwriting each income stream on its own terms, then adding them together.
Commercial space usually carries longer leases, often triple net, while apartments carry short leases and the owner pays more of the costs. The example below uses assumed figures to show the method.
| Line | Ground-floor retail | Four apartments above |
|---|---|---|
| Space or units | 3,000 sq ft at $20 triple net | 4 units at $1,800 a month |
| Gross rent | $60,000 | $86,400 |
| Less 5% vacancy | $57,000 | $82,080 |
| Less owner-paid expenses | Mostly paid by the tenant | $32,832 (assumed 40%) |
| Net operating income | $57,000 | $49,248 |
| Assumed cap rate | 6.5% | 6.0% |
| Value of this part | About $877,000 | About $821,000 |
Together the two parts point to a value near $1.7 million, a blended cap rate of about 6.3%. Appraisers may weigh the parts differently, and resort towns have few mixed-use comparables. An opinion of value from a local broker built from local sales is a sensible cross-check. The general method is in valuing Colorado commercial buildings.
Leases in a Mixed-Use Building
The two halves of a mixed-use building run on different leases and different laws.
- Commercial leases: Usually multi-year, often triple net, with the tenant paying a share of taxes, insurance and maintenance. See how CAM charges are split.
- Residential leases: Short-term and covered by Colorado landlord-tenant law. Landlords may raise rent only once in any 12-month period, and since 2024 most evictions need cause.
The RMCRE Durango outlook notes that properties with existing five-year triple net leases to established operators offer a more passive investment. Short, month-to-month commercial leases add risk but also room to raise rents. The residential rules are covered in more depth in the multifamily investing guide.
How to Finance a Mixed-Use Building
The loan for a mixed-use building depends on how the building is used and who occupies it.
A business that occupies at least 51% of a mixed-use building can use owner-occupied commercial financing and lease the rest; see owner-occupied commercial loans in Colorado. Some lenders treat mixed-use as riskier and price the loan that way. SBA 504 loans can fund a building a business will use, but not a rental investment.
| Situation | Usual loan route |
|---|---|
| Your business uses most of the building | Owner-occupied bank loan or SBA 504 |
| Mostly apartments with a small shop | Multifamily-style financing, depending on the lender’s limits on commercial space |
| Mostly commercial with a few apartments | Commercial investment loan |
| New construction | Construction loan, then permanent financing once leased |
SBA 504 loans offer 10-, 20- and 25-year terms, and the SBA-backed portion is capped at $5 million for most borrowers ($5.5 million for small manufacturers and certain energy projects). A commercial construction loan is the usual route for building a new mixed-use project.
Buying a Mixed-Use Building in Colorado
Before buying a mixed-use building in Colorado, check the zoning, both income streams and the building’s condition.
- Confirm the zoning allows every current use.
- Review the commercial and residential leases separately.
- Inspect closely, since mountain weather wears buildings faster.
- Check local short-term rental and housing rules.
Current listings include mixed-use buildings in Salida, Grand Junction and Hotchkiss. The standard steps are in the Colorado commercial buying process.
Due Diligence Checklist for Mixed-Use
- Zoning and use: confirm each use is allowed, not just grandfathered; see commercial zoning basics.
- Deed restrictions: look for covenants that cap rents or limit who can live in the units.
- Short-term rentals: if upper units are rented nightly, confirm the town’s license rules and any cap.
- Building systems: separate meters, fire separation between floors and code access to upper units.
- Tax classification: ask the assessor how the residential and commercial shares are split.
- Insurance: price a policy that covers both commercial and residential tenants.
- Lease audit: match every lease to the rent roll and bank deposits.
Frequently Asked Questions
What is an example of a mixed-use property?
A downtown building with a restaurant on the ground floor and apartments above is the classic example. Frisco’s Foote’s Rest, which combines a hotel, restaurants, an entertainment venue and employee housing, is a larger one.
Is mixed-use property commercial or residential?
It is both, which is why lenders and assessors treat it case by case. In Colorado, the residential share can be assessed at the residential rate and the commercial share at the commercial rate.
Is a mixed-use building a good investment?
It can be, because two income streams spread the risk across tenants and seasons. It also asks more of the owner: two kinds of leases, two sets of laws and harder financing.
Can I live in a mixed-use building I own?
Often yes, if zoning allows homes in the building. Living upstairs and running a business downstairs is a common live-work arrangement in small mountain towns.
Can I get an SBA loan for a mixed-use building?
Yes, if your business occupies at least 51% of the building. SBA 504 loans cannot fund a building bought purely as a rental investment.
Mixed-Use Deals Through the RMCRE Network
RMCRE brokers handle investment property, both income-producing and mixed-use. For larger sites, the development service supports master planning, where phasing and the mix of uses decide whether a project works. Learn more about mixed-use development support.
We have been a network of partner brokers across Colorado mountain towns since 2010, with brokers in towns such as Salida and Steamboat Springs.
