For two decades the standard mixed use formula was apartments over ground floor retail, maybe a courtyard, maybe a rooftop deck. That formula is tapped out. Renters and buyers have seen it enough times that it no longer commands the premium it used to, and lenders know it. If the amenity package on your pro forma is a gym and a pool, you are not standing out in this market.
What is standing out are developments built around a single anchor amenity big enough, and expensive enough, that it becomes the whole reason people show up. Surf parks are the clearest recent example of this. They are capital intensive, the water, power and infrastructure costs are real, and the only way the math works is to spread that cost across a much larger development. Once you do that, the surf park stops being a novelty and becomes the front door to a hotel, a retail district and hundreds or thousands of residential units.
Surf Park Central puts the industry at $4B in value last year, with roughly 26 parks built worldwide over the last decade and that number expected to double within the next year. That growth is not happening because more people want to surf indoors. It is happening because developers have figured out that a surf park, done right, functions the same way a stadium, a ski mountain or a championship golf course has functioned for decades: as the anchor tenant for an entire community.
The pattern is not new, it is just spreading to a new amenity. Professional sports have proven this model at scale. Stadium districts that used to sit alone in a sea of parking are now wrapped in office towers, hotels and apartments that fill up on nights when there is no game at all, because the stadium gave the whole district an identity worth building around. Golf did the same thing before anyone called it mixed use, entire luxury residential markets have been built and sold purely on proximity to a championship course. Ski towns wrote this playbook first, the mountain and the lift infrastructure came before a single condo was sold, and the real estate has always been priced on distance to the lift line. Mountain biking is running the same play today in smaller markets that invested in trail systems and watched real estate values follow.
Surf parks are simply the newest and most flexible version of that same idea, because unlike a coastline, a mountain range or a professional sports franchise, you can put one almost anywhere there is power, water and land.
We have been active in exactly this space, evaluating and financing residential developments built around a single anchor amenity rather than a mix of small conveniences. That includes a surf park anchored community, several ski and golf resort communities, and workforce housing developments tied directly to a resort amenity base. In every one of these, the underwriting question is the same one I would ask about any deal: is the amenity strong enough, and differentiated enough, that people will choose this location over a competing project with a lazy river and a clubhouse. When the answer is yes, the residential and retail absorb faster, rents clear higher, and the project has a story that a leasing team can actually sell instead of a generic list of finishes.
The developers who are winning right now are not asking which amenity fits the site. They are starting with the amenity and building the site plan around it. A surf park, a stadium, a ski hill, a bike park or a golf course, it does not matter which one, the amenity has to come first. Everything else, the apartments, the retail, the hotel keys, is downstream of that decision.
That is the real lesson in all of this. Today a box with four walls and a roof does not sell itself and it does not lease itself, not at the rents and prices this market demands. People have too many choices, and every one of those choices looks the same on a floor plan. The differentiator is what is happening ninety seconds outside the front door. A resident who can walk to a wave pool, a ski lift, a golf course or a stadium district is not just renting square footage, they are buying into a way of life, and they will pay for that every single month.
That is why I believe the amenity is no longer optional and it is no longer an afterthought bolted onto the back of the site plan. It is the product. Get the amenity right, build real community and identity around it, and the residential and retail take care of themselves. That is the standard I hold every deal to now, and it is the standard I think this entire industry is moving toward.
About the author
Daniel Kaufman is the founder and CEO of Kaufman & Company, a private investment and holding firm working across real estate development, private credit, venture investment and infrastructure. He has spent more than 25 years building, lending and investing across housing markets, starting his real estate career in Detroit in 1992. His focus today is on workforce housing and amenity anchored development in mountain resort communities. He can be reached at Daniel@kaufmanredev.com or 341 217 2580, on LinkedIn at danielekaufman, or at danielkaufmanre.com.
