It’s time to bust out your crystal balls, throw on your prognosticating caps and peer deeply into the future for another attempt at predicting the biggest trends that will impact the CRE industry in future years. So, what big, world-impacting, life-as-we-know-it changing, event are the brightest minds in CRE anticipating right now? If you guessed global warming, war or world trade…you’d be wrong. Today we’re talking millennials as the cultural and demographic shift set to see the wildest shifts in commercial real estate since, well, sliced bread. Yup, those pesky little Gen-Y’ers, born somewhere about 1980-1995, are surging into the work place and worth tracking for your CRE portfolio; and we’re here to tell you why.
Suburban Housing Meets Urban Convenience
Its undeniable that each generation brings with it their own quirks that end up influencing the way companies do business. Before the millennials were old enough to move out of their parent’s home and become regular ole consumers, talking heads and CRE experts alike predicted a shift to a more urban setting for these hip, young trendsetters. We won’t say they got it wrong…but…
It turns out that millennials are flocking to the suburbs to escape the high cost of urban living and to embrace what’s perceived as a simpler, less consumer way of life. That doesn’t mean these growing economic influencers aren’t wanting to keep their conveniences of modern life at bay. CRE professionals should watch for the growing trend of smaller commercial units, jam-packed with services, restaurants and more as millennials look to bring the comforts of big city life to the peace, quiet and small town living of suburbia.
Look up from that Smartphone Why Don’tcha
Let’s face it. It’s been quite some time since the tableau of a group of friends gathered around a table with cellphones in hand was anything newsworthy. Advancement in technology and our increasingly connected digital world has ensured that wherever we go, whatever we do, exchanging information via the internet and developing technologies will continue to be a mainstay. Tenants will come to expect wired offices, smart alarms and advance remote and integrated capabilities to better serve their employees and customers. CRE professionals in the building process should be sure to look to future trends when integrating technology and existing units may need to push up timetables for modernization to keep tenants happy and occupancy rates high.
If by Office you Mean the Kitchen Table…
The last of our big “millennial trends to watch” has been popping its head up in other generations as well. The millennial generation is increasingly one of remote worksites and flexible office space. Companies staffed, run or owned by younger generations just aren’t seeing the need or benefit of that long-storied “face time.” CRE portfolio owners and managers should use this knowledge to take a hard look at individual properties within portfolios. As the need for physical office space declines, it may be time to convert or liquidate some of your existing assets in order to maintain diversity and a strong tenant base.
The Millennial Bottom Line
While we may offer a tongue-in-cheek view of the need to always be on your phone or the commitment to putting on pants to commute into a physical office space, the truth of the matter is CRE professionals should be paying attention to this increasingly important demographic. Millennials currently make up about 30% of the population and will continue to set new trends and influence economies domestic and worldwide in the coming years. A little foresight and planning now can help your CRE portfolio accommodate and cater to the needs of this far-from-lost generation.