The so-called Millennial generation is suddenly poised to become the most numerous segment of the U.S. population. According to Pew Research, in 2015, for the first time, there will be more Millennials than Baby Boomers. According to an interesting report published by the White House last fall, millennials –defined as people born between 1980 and 2004- now make up one-third of the total U.S. population.
The Brookings Institute estimates that by 2025, millennials will make up 75 percent of the workforce. As they enter adulthood, millennials are having a tremendous influence on how we do business.
Millennials are characterized by their attachment to technology –this generation can’t remember a world without the Internet- and their tendency to work in a social and collaborative way. They also place a lot of value on sustainability and amenities in the workplace. They’ve led the movement toward the live-work-play lifestyle, looking for a work location that is convenient to other aspects of their lives. Urban locations near affordable housing and city attractions are appealing to this demographic, which values the time that might otherwise be lost in a long commute.
When a third of the population shares a distinctive set of tendencies like these, there are implications for all types of business, and CRE is certainly no exception. The impact of millennials is being felt in the industry to a growing extent, and they seem to be running the show in several areas.
The changing face of the U.S. workplace is an important CRE trend that can be laid at the millennial doorstep. Millennials and the start-up culture favor open floorplans and collaborative workspaces. They value flexibility and common areas that are set up for specific tasks rather than specific people. With mobile technology driving tasks, there is less reason to be tied to a desk or holed up in private office. Millennials like to work in different areas of the space, like lounges, coffee bars or outdoor spaces. Increasingly, space is being redesigned to meet their expectations.
Expectations for workplace amenities have also been heavily influenced by millennials, who appreciate locations near city attractions, like museums and dining, as well as convenient transit options. Within the workspace itself, employers are looking to provide extras like lounges, game rooms, and gym spaces that encourage employees to spend more time at the office and to like it.
Another millennial priority that’s being applied in commercial spaces is green design. The importance of considerations like natural light, sustainable materials, and energy efficiency has grown, as reflected by the enormous emphasis being placed on LEED Certification for new and existing work spaces. The U.S. Green Building Council reports:
675.9 million square feet of (U.S.) real estate space became LEED certified in 2014, the largest area ever to become LEED certified in a single calendar year, and a 13.2 percent increase in total certified square-footage from 2013. 2015 looks to be another record-breaking year with 2,870 projects certified representing nearly 464 million square feet of real estate as of August 1, 2015.
Considering their dominance of the workplace, which will only grow in coming years, millennials should be on the minds of CRE developers. Understanding their priorities can inform planning and design, creating the type of workspace that attracts them and keeps spaces leased.
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