How Millennials Will Continue to Impact Real Estate in 2020 and Beyond
January 3, 2020
Millennials – commonly cited as those born in the 1980s and 1990s – have been a hot topic for the past decade across many industries, in part because they have become the largest U.S. generation in terms of population, the leading generation in the workforce, and make up almost all of the key 18- to 35-year-old advertising demographic.
It's worth reiterating that millennials are now the largest portion of the population, surpassing baby boomers, generation x, and the up-and-coming gen z. Following, we discuss how millennials continue to affect real estate and are expected to do in 2020 and beyond.
Commercial Real Estate
Outside of buying and investing in commercial property, millennials continue to shape today's commercial real estate market based on what they value most in a work environment. Listening to millennials' desires and demands on ideal work environments is an opportunity that shouldn’t be missed.
Research shows that millennials prefer walkable, mixed-use, centrally located, and transit-oriented environments. Overall, this shows that a building’s location and design play an integral role in defining a job as being an attractive option; meaning they place a high value on living near their workplaces which would also ideally be located around shops, restaurants, and entertainment that can be accessed after work.
One major millennial trademark is the open office; however, this layout has surpassed just a millennial mindset. The International Facility Management Association reports that up to 70 percent of American employees spend their working lives in open floor plan offices. Open offices offer collaboration, communication, competitiveness, and creativity. Knowing this, developers, building managers, and buyers should likely start catering to such needs and desires.
Millennials as Renters
Though millennials are part of the same generation, millennial renters can be at very different stages in their lives regarding family, work, and stability than millennial buyers, and therefore need different things. This should be taken into consideration, especially because they also make up the largest renting demographic entering into 2020. It’s up to property owners, brokers, and landlords to adapt and rebrand to their interests.
According to Pew Research, millennials are the most educated generation to date, and likely have higher income to put toward rental fees. Although wage increases still haven’t kept up with inflation, some millennials might very likely have more disposable income when renting.
Beyond geography, it is also known that millennials are willing to pay more for modern appliances, tech, and fixtures. Lastly, focusing on convenience and ease that millennials appreciate, owners should consider expenses that can be bundled into rent like parking spots, cable, electricity, and utilities. Tiered rent plans for millennials looking to bundle their expenses can be an amazing upsell opportunity.
Millennials Driving Tech & Sustainability
Millennials are all about eco-consciousness and the latest innovations. We know that one way to attract them is to offer sustainable spaces (low-flow water systems, solar energy, recycling services, etc.) and eco-friendly features like bike racks, green spaces, and trails with walkability. Technology-based solutions dovetail nicely with their eco-mindedness and the idea of smart spaces.
Whether you fall into the millennial demographic or not, it is important to keep in mind that millennials are greatly driving real estate, and that they will continue to do so through 2020 and beyond. Luckily, there are many tools available for owners, managers, and landlords to utilize in order to best market to this generation.
Valbridge appraisers evaluate commercial property based on objective criteria, in-depth knowledge of local property markets, and time-tested judgment. We identify and analyze the variables that affect value, helping you best invest your time and labor into a space that will be attractive to all. Get in touch with us today to learn more.