Call us today at:(954) 320 - 6031

Commercial Real Estate, Multifamily, News, Office

Millennials Influence CRE Design

Perhaps more than any other generation, millennials are having a profound influence on CRE design. The real estate industry has taken notice and certain trends catered to millennials are starting to become the industry norm. According to the most recent population estimates released by the U.S. Census Bureau, millennials have overtaken baby boomers as the largest living generation. The office, multifamily, and retail sectors are all changing to adapt to this emerging generation.

Office Goes Collaborative

Of all of the CRE design trends influenced by millennials, changes in the office sector may be the most apparent. Long gone are the days of expecting college graduates to jump at any job opportunity that provides them with a cubicle and a company computer. The wants and needs of this generation are much different from their predecessors. For instance, millennials are more inclined to pass up good job offers for opportunities that they find more comfortable. One company who recognized this trend and was quick to act upon it is WeWork. WeWork provides custom built-out office space for companies ranging anywhere from 1-100 employees. This offers employers optimal office space flexibility. The beauty of WeWork is that most of their workspaces are large and open such that more than one company can occupy the space at a given time. Aside from WeWork and other collaborative workspace providers, some employers are doing custom build-outs of their own offices to attract younger employees. These new offices offer perks rarely seen before in this industry. Some examples are:

  • Free Food and Drinks
  • Modern Artwork
  • Game Systems
  • Ping Pong Tables
  • Exercise Rooms
  • Kegerators (refrigerator with a beer keg on the inside)

 

CRE Design

An example of modern office space in 2016.

Multifamily – Smaller Can Be Better

The multifamily market is also adapting to appeal to millennials. Past generations were content with twenty-minute car rides to the grocer but the same can’t be said for young people. Developers realized that these individuals enjoy being around all of the action the town has to offer so they adopted an urban core proximity strategy. The closer their apartments are to the downtown area, the better. Walkability and the opportunity to ride their bike to work are key to attracting today’s young people. Another emerging trend in multifamily design is smaller unit sizes. Millennials will sacrifice unit size for cheaper rent if they can be close to all of their favorite spots. Furthermore, millennials seek amenity-rich buildings. Rooftop pools, game rooms, upscale gyms and a Starbucks in the building are just a few examples of how developers are targeting this new generation of younger residents.

Retail – Adapt or Be Left Behind

Traditional brick and mortar stores are undergoing major changes. Millennials utilize online shopping more than ever.  This trend has affected how retailers interact with this audience as well as the role real estate plays in the process. Some retail stores are changing by downsizing and completely shifting their marketing strategy to be more engaging on social media and other channels through an omnichannel strategy. “Omnichannel” refers to process whereby retailers now must engage with their customers and deliver a consistent brand experience across all marketing channels.  The digital environment has forced retailers to adapt to how this generation shops.  A clear example of this is a partnership between Best Buy and Microsoft whereby Best Buy has opened “mini stores” that focus on Microsoft products.  In the past, customers would use the large Best Buy stores as showrooms to “touch and feel” products before purchasing them more cheaply online. The “mini stores” reduce overhead costs relative to the traditional “big box” stores.  These and similar “mini stores” are popping up in urban areas to cater to millennials as opposed to the traditional suburban shopping mall. Millennials seek urban environments and online engagement.  Retailers must remain nimble and continue to adapt or risk being left behind (e.g. Sports Authority).

What’s Next?

Who knows what other impacts Millennials will have on CRE design and the overall real estate industry going forward?  What has become clear in recent years it that this generation is flourishing in a digital environment prior generations could not have imagined.  Change happens fast and the impacts can be immense.

Published July 2016 by CapasGroup Realty Advisors

 

There are no responses so far. Be the first to leave one →