The millennial generation currently makes up approximately 38% of the workforce in the United St
ates. This number will naturally increase as the youngest millennials graduate from college.
Taking into account not only their strength in numbers but unique perspective towards life and business, it is only logical that they would drive some of the major trends occurring around us. In fact, millennials have an impact on nearly every industry in some form or fashion. Consider these four ways in which they’re impacting the industrial real estate landscape today.
#1 Workplace Culture
As a whole, millennials are driven individuals that thrive in a competitive environment. Their creative personalities and high levels of innovation carry over from their personal lives into the workplace. Millennials are more likely to stay with a company that fosters a unique environment. Shared workspaces rather than individual cubicles remain on the rise and flexible schedules are becoming a more commonly accepted practice. Rather than a strict 9-5 workday, some individuals might work 10-6 or 7-3 or even work from home a few days eac
h week. These adjustable hours earn the loyalty of many employees who might have gone elsewhere to find a schedule that fits their needs.
#2 Living Near the Office
New ideas and technologies are impacting how we work, travel, shop and the places we live. The millennial generation is the primary force behind the trend of modernization in the workplace and home. Cutting edge living environments are being created across the US. Since this generation as a whole is waiting until later in life to have children, they typically do not follow in their parents’ footsteps by relocating to the suburbs in their late 20s. Increased demand for alternative living is abundant and older industrial properties are perfectly suited to be refurbished. The latest urban paradigms are setting exciting new standards in architecture and this trend is not likely to cease anytime soon.
ing Older Buildings
Old has become new again. In many places, the city center is near older downtown areas that have been rejuvenated over the last few years. The combination of these factors has increased demand for former industrial properties. Many aging industrial sites, such as older warehouses or manufacturing plants that are out of use, have recently been repurposed. These open spaces work well for millennials’ and it’s not uncommon to see this real estate turned into mixed-use complexes offering a variety of residential, retail and office related uses.
One side effect created by these types of conversions is that older properties values have changed dramatically. Investors are now interested in real estate that wouldn’t have warranted a second glance 10 years ago. This recycling has affected more than just one financial sector.
Millennials are also driving significant changes outside of the home and workplace. While online ordering is a rising trend in every demographic, millennials are at the forefront of this shift. As a direct result, the demand for warehouse space for e-commerce businesses such as Amazon is at an all-time high. With the rollout of same day delivery, Amazon has had to drastically increase the dispersion of their shipping hubs. This transition from a focus on primarily main warehouses to now include smaller strategic warehouses in major cities, has greatly increased the need for easily accessible, highly functional industrial space.
By the way, Generation Z is closely behind. How are you seeing millennials impact the real estate market in your niche area?
This is certainly a trend to keep an eye on, no matter what your role might be in the real estate sector.