Family Offices - A Resilient Investment Strategy

Eddie Luhrassebi

Let’s be honest—when you’re managing a family office, you’re playing a long game. You’re not chasing hype or short-term wins, you’re looking for investments that are durable, diverse, and resilient – assets that can weather market cycles and still grow over time. And that’s exactly why I believe mixed-use real estate developments deserve a spot in your portfolio.

Now, I know real estate isn’t new to most family offices. Many already hold residential or commercial properties. But mixed-use is a different animal – it blends the best of both worlds. And in today’s climate, that blend is proving to be a real advantage.

What Makes Mixed-Use So Compelling?

At its core, mixed-use development combines residential, retail, office, and sometimes hospitality into a single, walkable ecosystem. Think of a vibrant community where people live, work, shop, and gather – all within a few blocks. This concept isn’t just about convenience; it’s about economic synergy. When each piece supports the other, the whole becomes stronger and more resilient.

For a family office looking to balance growth and security, that’s exactly the kind of structure you want backing your capital.

Diversification Inside a Single Asset

Here’s where it gets interesting from an investment standpoint: mixed-use is diversified by design. When one component – say, retail – is underperforming, others (like residential or office leasing) may remain strong. That internal diversification helps stabilize cash flow in ways traditional single-use properties can’t.

Let’s say you own a standalone retail building. If the tenant leaves, you’re suddenly at 0% occupancy. But in a mixed-use asset, even if your retail tenant turns over, your residential units are still generating income. That buffer matters. And over the long term, it smooths out volatility in a portfolio.

Responding to Shifting Demographics and Preferences

Consumer and tenant behavior has shifted dramatically over the past decade—and COVID only accelerated that trend. People now want walkable communities, less commuting, and access to amenities right outside their door. Remote and hybrid work models have also reshaped how people view space.

Mixed-use developments naturally align with these preferences. They aren’t just buildings, they’re communities, and they tend to stay relevant even as lifestyle trends evolve. That’s a long-term hedge against obsolescence, and for a family office, that’s gold.

Urban Infill = Long-Term Value

Mixed-use real estate often shows up in urban infill areas – places where land is limited, and demand is strong. California is a great example. With cities like Los Angeles, San Diego, and San Francisco all struggling with housing shortages and infrastructure strain, mixed-use development has become a practical solution for modern urban growth.

And here’s the beauty: when you develop or invest in a well-located mixed-use project in a supply-constrained area, you’re essentially buying into long-term scarcity. That’s powerful for capital preservation and appreciation—two things family offices care deeply about.

Long-Term Cash Flow and Tax Advantages

Family offices often favor investments that produce predictable, long-term cash flow. Mixed-use developments, once stabilized, offer that in spades. Rents from residential units, long-term retail leases, and even office or co-working spaces create layered income streams that mature nicely over time.

And let’s not forget about the tax benefits. Real estate offers accelerated depreciation, 1031 exchange opportunities, and other strategies to minimize tax exposure. In a mixed-use context, those benefits are multiplied across asset types.

The ESG and Legacy Angle

Now, let’s step back for a second. Many family offices are not just thinking about returns, they’re thinking about legacy. About ESG (Environmental, Social, and Governance) impact. About how their capital shapes communities.

Mixed-use real estate is uniquely positioned to check all those boxes. Done right, these developments:

●       Promote sustainability by reducing car dependency

●       Foster local economic development

●       Create community spaces that elevate quality of life

For family offices focused on multi-generational impact, that’s the kind of story worth telling.

Real-World Case Study: Look at What’s Happening

Just look at what’s happening in places like Oakland, Rohnert Park and Pasadena. Developers are turning outdated commercial lots into mixed-use hubs with housing on top, retail on the ground, and offices tucked in between. These projects are attracting residents, local businesses, and even institutional capital.

Take SOMO Village in Rohnert Park as an example, it’s a mixed-use redevelopment of a former industrial campus, encompassing 1,750 residential units and 600,000 square feet of commercial and retail space. Construction is planned over the next 12 years, with significant milestones expected in 2025. This model of rolling out desirable amenities in a reimagined walkable neighborhood over time is not just innovative—that’s a forward-thinking real estate strategy.

So, What’s the Move?

If you’re running or advising a family office and want to:

●       Diversify within your real estate holdings

●       Generate long-term, inflation-resistant cash flow

●       Preserve and grow capital in a meaningful way

… then mixed-use development should be on your radar. You can go the development route, partner with experienced sponsors, or invest in stabilized assets – it all depends on your risk appetite and timeline.

But the opportunity is clear: mixed-use is not a trend. It’s a long-term play that aligns beautifully with the goals, values, and time horizons of most family offices.

And if you’d like to explore how to get started or evaluate a project you’re looking at, I’d be happy to talk through it. This space is only getting more relevant—and the time to lean in is now.