According to data from Pew Research, this year for the first time, there will be more Millennials than Baby Boomers in the U.S. The Census Bureau predicts that they’ll outnumber the Boomers by almost half a million, and the difference will only grow as the years go on. Millennials make up the generation born roughly between 1980 and 2000, and their lifestyle preferences are having a big impact on commercial real estate.
Impact on Space Design
Millennials place a high value on collaboration and social connections. This has been a big factor behind the move to more open office spaces. The modern workplace includes more common spaces for interaction, with space designed for particular tasks and activities rather than particular people.
Enjoying the time spent at work is important to millennials, and they look for amenities in the workplace. This has led to the popularity of office perks like coffee bars, outdoor spaces, game rooms, and onsite daycare.
Given their connection to technology, it’s not surprising that millennials expect their workplace to be fully wired, and have the infrastructure in place to facilitate their use of digital tools. Plentiful connection points and powerful WiFi are essential, as millennials rely on a wide variety of devices to get the job done.
Along with this comes the idea of space requirements. In many cases, the modern workplace includes fewer square feet per employee, as more shared spaces are adopted. Hardware is becoming less bulky and mobility allows for multiple uses of a single space, which eliminates empty conference rooms.
Millennial shopping habits also influence design of retail space. To meet consumers’ expectations, many companies offer omni-channel shopping, which creates a seamless connection between the brick and mortar store and the company’s online presence. This changes the picture for retail design and owners should partner with their tenants to anticipate their technology needs and make it part of the store design.
Another consideration that comes along with omni-channel retail is the distribution of merchandise. Retailers are combining distribution systems for online orders and offline shopping. This has an impact on space requirements as the proximity of warehouse space becomes more important.
Overall, this generation has a lower rate of homeownership than older groups. According to a report from Harvard, two-thirds of those ages (25-39) currently rent their homes. This is due in part to the economic downturn, student loan debt, and a tough job market, but it also has a lot to do with their approach to living. Millennials form a large pool of potential tenants for multi-family properties.
Millennials protect their quality of life, and a long commute to a sterile office space is not what they have in mind. As a group, they like to be able to walk to good dining, residential options, and recreation. They prefer to live near the workplace, and they prefer a workplace that is near community amenities.
Effective marketing to millennials will include information on these. Is there a bike trail nearby? A gym in the building? Are city attractions like museums and performance venues nearby? These considerations have led to some shifts in location for desirable properties –both office and residential spaces.
Preference for Digital
Millennials prefer to conduct business online when possible, and connecting with them means providing ways to do so. Multi-family property management can be enhanced with tools like online rent payment and leasing renewals, and managers should take advantage of a variety of communication channels (email, text, social media, and mobile apps).
Millennials are also quick to embrace the idea of online investing, and this has helped advance the explosion in real estate crowdfunding that we’ve seen in the past few years.
Emphasis on Sustainability
As a group, millennials are concerned about the environment and want to live as sustainably as possible. Employers and managers are providing spaces that cater to this preference by increasingly choosing green buildings and sustainable practices.
Features like rainwater catchers, recycling collection, bike storage and energy efficient lighting will score big points with Millennials, and can even be related to better health and productivity.
About NAI Global
NAI Global is the single largest, most powerful global network of owner-operated commercial real estate brokerage firms. NAI Global provides a full range of corporate real estate services, including brokerage and leasing, property and facilities management, real estate investment and capital market services, due diligence, global supply chain and logistics consulting and related advisory services. NAI Global Member firms, leaders in their local markets, are actively managed to work in unison and provide clients with exceptional solutions to their commercial real estate needs. Founded in 1978, today NAI Global has more than 375 offices strategically located throughout North America, Latin America, Europe and Asia Pacific, with over 6,700 local market professionals, managing over 380 million square feet of property. Supported by the central resources of the NAI Global network, Member firms deliver market-leading services locally and combine their in-market strengths to form a powerful bond of insights and execution for clients with multi-market challenges.
NAI Global was acquired in 2012 by C-III Capital Partners, a leading commercial real estate services company engaged in a broad range of activities, including primary and special loan servicing, loan origination, fund management, CDO management, principal investment, online capital markets, title services and multifamily property management. C-III’s principal place of business is located in Irving, TX, with additional offices in New York, NY, Greenville, SC and Nashville, TN.
To learn more, visit www.naiglobal.com.