There’s more to the millennial generation than being obsessed with smartphones and the mentality of working to live — and it’s important you understand this age group because they are having some major effects on today’s commercial real estate market.
To give you some background, here’s a breakdown and some stats on the people who make up this generation, according to Business Magazine Gainesville:
- Born between 1980 and 2004
- Also known as Generation Y
- Made up of about 80 million people
- Spend about $600 million a year
- Expected to spend more than $1 trillion annually by 2020
Millennials will make up 75 percent of the workforce by 2025, according to the Brookings Institute.
Not only is this generation our future, but it’s also affecting the real estate industry now. So, it’s important to understand what they’re looking for and start implementing it into your property.
Here are six key effects millennials are presently having on commercial real estate.
For a generation used to finding the answers to all of their questions on their smartphones, tablets and computers, being able to see every aspect of a property online will be a must going forward.
They want to see an abundance of photos and videos from both the inside and outside of properties — and they want to access it immediately, according to an article on National Real Estate Investor.
Video tours are going to become a staple for commercial real estate listings. They want to be able to experience the property without every having to leave their home. So, commercial property managers must adapt and start incorporating these digital offerings.
Growth of Mixed-Use Neighborhoods
The American dream of owning a home has lost its luster for the millennial group. Now, they are choosing to rent longer, instead of purchasing a home, and that’s affecting the number of multi-family complexes and the types of amenities they are offering.
Nationally, there were about 351,000 multi-family units started in 2014, which was up nearly 14 percent over 2013 — and more than double the 6.6 percent growth rate for total housing starts last year, according to the National Association of Home Builders.
Multi-family properties are upping the amount and level of amenities that are important to millennials, like walking trails, common spaces, rooftop terraces, bike storage and even dry cleaning services. Some higher-end rental properties have incorporated lobbies, similar to what you’d find in a hotel, to compete for this group.
From how they communicate with millennials to the site amenities they provide, property managers are embracing technological advances in their sites.
Millennials have grown up in a high-tech world and expect it from commercial properties.
Some apartment complexes are adding USB ports, dependable WiFi, iCafes and other features to common spaces, according to Building Design & Construction.
The industry is also starting to give tenants more control over their environments through different technologies. Forest City, a builder and developer, installed cloud-connected devices in some Dallas and DC apartments, BD&C says. This allows the tenants to monitor and regulate things like their lighting, heating and cooling.
Millennials like things to be immediate and want to have command over their living spaces.
More Shared Working Spaces
Some businesses are already changing employee requirements, giving them more freedom to get out of the office. They aren’t tied to an office space as much like in the past, and that’s something millennials are going to expect even more going forward.
According to Paladino, 69 percent of millennials believe attendance at the office on a regular basis is unnecessary. With more employees taking their work to common spaces — like Starbucks or co-working spaces — property managers have to change the way they think about offices.
To attract this age group, managers should make the building’s working space open and inviting. Millennials don’t want to be shut off by barriers like cubicles.
They also want to bring the work outdoors, so properties with common outside spaces are going to be more popular with this group. Patios and seating areas will really set office and residential properties apart.
This generation is very visual and responds better to certain building designs.
They like main street retail design better than stand-alone, big boxes and other standard shopping centers, according to Robert Wulff, Director of George Mason’s Center for Real Estate Entrepreneurship. So, there’s going to be combinations of main street and box-type stores in a more organic design to catch their attention.
Millennials also value change, so the real estate can’t become stagnant. It will need regular updates or enhancements, such as adding more modern signage or even a new common area.
Focus on Environment
Millennials are more focused on sustainable living than past generations, and that’s affecting which cities and types living places they choose.
Urban areas are attractive to this age bracket, especially places with public transportation or the ability to ride their bikes to work. Real estate that’s near transportation stops or has built-in bike racks will cater to millennials’ expectations. So, you can expect to see an increase in the population for these types of areas.
With millennials wanting sustainability, more real estate sites will also work toward being LEED certified. If not becoming fully certified, properties will still look to incorporate certain sustainable aspects to attract millennials.
Is Your Commercial Property Attractive To Millennials?
You can’t afford to ignore this growing generation. Millennials are already having an effect on real estate, and that trend is only going to spread in the next few years.
That’s going to require you to make purposeful decisions for both the inside and out of your commercial property, whether that’s adding a patio area or enhancing your landscape’s sustainability.
At HighGrove Partners, we are constantly tracking trends to keep our clients informed and their properties full. We are a full-service commercial landscaping company covering the Atlanta area.
So, if you’re looking for a landscape maintenance partner for your commercial property, let our experts at HighGrove conduct a complimentary property assessment of your site. You can also call us at 678-298-0550 or contact us online.Last modified: June 3, 2021