The Everest Newsletter: Commercial, September ’18 Edition
Millennials out. Generation Z in.
Shifting trends signal big changes for commercial design
|
Just the Peaks This newsletter, at a glance
|
Marketing experts teamed up with today’s top cultural anthropologists to break down the many transformations creeping up on commercial real estate. Born after 1996, people known as ‘Generation Z’ represent 25% of the US population. With the group’s oldest members turning 22 this year, researchers anticipate a huge shift in trends to coincide with their newfound buying power. Smart investors should familiarize themselves with these changes. While some are subtle, others resonate on a revolutionary level.
Their world: a world of difference
In just two short years, Gen Z will comprise 40% of all U.S. consumers, making them one of the most powerful market influencers. Millennials born between 1981 and 1996 will still command developers’ interests, but they’ll have to contend with younger buyers’ demand for all things digital.
“Where most millennials can at least remember a time when the Internet wasn’t all-consuming, Generation Z more or less grew up with smartphones in their hands, the world at the tips of their thumbs,” says Brian Zrimsek of MRI Software. “If those serving Gen Z resist adopting a digital approach, they’ll find themselves left behind, trying to reach the new generation on the one smartphone app they hate to use: the phone.”
Developers, architects and designers are already jumping ahead of the curve, slowly but surely integrating Gen Z preferences into new projects. To get a better handle on what could be an enormous shift, strategists have split up the commercial sector into five distinct areas: multifamily, industrial, retail, hospitality and office real estate.
Building to pleaZe
Whether you’re looking to expand your portfolio, retrofit existing properties, or make an inaugural break into the commercial sector, inform your future planning with the Gen Z breakdown below. We compiled the top takeaways from a recent Bisnow National study before exploring the movement in greater detail:
Top 5 highlights
Gen Z demands
Multifamily homes
Desires include communal spaces, green building materials and IoT integration
Industrial sites
Changes include 3D printing technology, better ecommerce photos and suburban locales
Restaurants & retail
Demands include doorstep delivery, communal dining areas and shopping ‘experiences’
Hotels & resorts
Requests include low-cost accommodations, personalized amenities
Offices
Common needs include co-working spaces, environmental efficiency and walkable locales
and self check-in
*Read the full Bisnow article for more real estate revelations
Shaped by social media
Thanks to popular online platforms like Facebook, Instagram and LinkedIn, up-and-coming consumers will be connected to their peers more than ever. C-suite specialist Marcie Merriman says, “[W]hat constitutes family will be very different.” Young people will continue to live together in apartments, spending an average of $102k in rent by the time they reach the age of 30.
Experts expect a ‘community-based’ approach to trickle into everything from multifamily properties and offices to retail stores and restaurants. This means larger living spaces, co-working zones, and ‘transit-oriented’ locations as opposed to isolated ones. They also foresee the pervasive integration of smart TVs, USB outlets, hands-free technology, on-demand delivery services and other conveniences across industries.
As Gen Zers graduate from college and begin to enter the full-time workforce, investors should embrace the transition as early as possible. Merriman says the shift is ‘already here,’ so make changes now to position your portfolio for success.
Keep Gen Z on your real estate radar
Through every financed purchase or project,
Everest has you leading the pack