By Alexandra Pacurar
Millennials are, officially, the largest living generation, according to the U.S. Census Bureau. Naturally, this fact influences all sides of the real estate market, particularly design. From office buildings to shops, everything is created to cater to the millennial, who puts comfort and time-efficiency above everything else.
The first changes in design appeared in the office space sector. Generation Y members want more than just an open floor plan and large windows. Employers are interested in attracting young talent, so they adapt to market trends and raise the bet by adding original amenities. It all started as a cost-effective strategy. “When the economy started to turn down and employers wanted to move into new office spaces, they were looking at the expense of building out the interior of these offices. With all of these walls and they were really trying to pack more employees into smaller spaces. What that naturally led to was fewer enclosed offices and more open workspaces,” Brad Capas, president of CapasGroup Realty Advisors, told Commercial Property Executive.
It all evolved into an industry trend and then it became the norm. Now, it’s more like a competition between employers and even developers. Even from early stages of development, particularly when talking about office towers, millennials influence certain features of the new structure, including upgraded internet service. Also, the support columns are positioned so that the open floor plans are not affected. “It’s less expensive and if you design it in a way that’s modern, hip, trendy, it’s a very appealing environment for millennials. I know people in that generation that work in offices with amenities like game rooms, pool tables, collaborative areas with sofas, nap rooms, believe it or not. It’s very appealing to young professionals,” Capas told CPE.
However, office space design for millennials might just be on the verge of a change. A study by Oxford Economics asked whether all the hip, modern facilities offered by employers (especially in the tech and creative businesses) is what employees really want. Half of the respondents were millennials and more than 70 percent of the people surveyed confessed they work in open-plan offices. It turns out that uninterrupted work time is what these professionals valued most, while more than half of them complained about noise. None mentioned food or beverages as important benefits in the work place.
“The original argument was that putting people together in a collaborative environment will make them more productive, but if someone’s on the phone right next to you and you need quiet to concentrate, then its’ arguably less productive,” Brad Capas said. Having a sick colleague right next to you and lack of privacy are other challenges posed by the collaborative working environment.
Size Doesn’t Matter
Millennials are also a major factor when it comes to new residential constructions. Developers know that those in Generation Y compromise on the size of the apartment they usually rent rather than buy for the sake of walkability or quick access to entertainment and retail options. However, this trend also started because of rising costs, similar to what happened in the office space sector. “Developers had to figure out how to get more units in a given size building. What they found is that, in urban environments in particular, they were able to get about the same amount of rent for a smaller unit. For example, hypothetically, a tenant is paying $2,000 for a 1,000-square-foot apartment. If it’s a desirable, well-located property, close to amenities, developers figured out they can still get $2,000 from that tenant and that tenant will accept a smaller living space. Maybe 800 – 900 square feet,” Brad Capas said.
Millennials are willing to compromise a little bit on the space in favor of an amenity package and lifestyle that they like, and proximity and walkability that are so important in urban environments. “Today, in Miami, Fort Lauderdale, West Palm we’re seeing smaller unit size. 150 square feet smaller on average than the last generation of apartments and the rents per square foot are much higher,” Capas added.
Just like in office buildings, hip residential properties include innovative amenities that make modern life simple and more enjoyable. For example, nowadays, more and more people shop online. This translates into a high traffic of delivery agents in apartment communities. “Imagine 250 apartments in a high-rise getting one or two packages a week. Just think about the management involved in that and the space needed. Developers are now including package storage rooms and lockers in their buildings. This is a new phenomenon. There is a management process that goes with alerting residents the package is there and making sure they get them,” Brad Capas said. Storage rooms for bicycles and fitness centers are also amenities that are among millennials’ top preferences.
Millennials also influence the retail segment, especially when it comes to interior design. Physical stores are also in direct competition to the more and more popular online shops. It’s hard to tell what will come next, but one thing is for sure. Time-saving options and great access are now key for any urban development addressing the youth.
Image courtesy of CapasGroup Realty Advisors