Baby boomers are retiring at the rate of 10,000 per day and millennials are surpassing boomers as the largest generation. In fact, roughly 77 million millennials (ages 18-34) make up a quarter of the U.S. population today. Naturally, they are having a profound influence on office and housing.
As one of the leading organizations for commercial real estate, we must be effective students of these generational shifts. Commercial real estate will continue to transform as millennials become the largest part of the workforce, accelerating functional obsolescence in some areas and product types, but ultimately creating opportunity for developers, owners and investors.
This we know about the millennial generation: 1) They value work-life balance and social collaboration; 2) They hold themselves – and the businesses and brands they interact with – to high standards; 3) They often place a higher value on experiences over the acquisition of goods; and 4) Their ranks have been, and will continue to be, supplemented by immigration – nearly 500,000 foreign student visas are issued annually.
Not a generation striving for the corner office, millennials define “work” as what they do, not necessarily where they do it. Whether it’s in a trendy co-working center or a collaborative workspace within the office, millennials require the technology to tap into work any place, any time. Gene Zaino, president and CEO of MBO Partners, says that to compete for millennials, companies must enable 24/7 access to corporate programs on all devices, both inside and outside the office.
That said, location remains key. Millennials want the ability to connect quickly and easily with peers when they are not working, causing a high demand for housing in close proximity to workplaces and a preference for urban, walkable, mixed-use neighborhoods. When older millennials migrate out of downtown environments, they are moving to the next ring serviced by public transit that still offers an authentic urban experience.
Millennials are not only shaping the future of our industry – they are doing the same for our association. I’m proud to say that NAIOP recognized the opportunity to engage this generation long before others were talking about it, and launched the Developing Leaders program in 2005 as a way to give young commercial real estate professionals – ages 35 and under – the tools and connections they need to propel their careers forward.
Thanks to the support of our board and the tremendous efforts by our chapters, the program has been a success. A third of the entire membership are Developing Leaders, and millennials hold 19 percent of the chapter leadership positions today. We recognize the value of investing in this group through programs, mentorship and resources – not because they are the future of our industry, but because they form an integral part of our industry now.
Ashley Powell is a 30+ year commercial real estate veteran and an 18-year member of NAIOP, where he serves as chairman. Professionally, he leads the acquisitions team in the western United States for Bentall Kennedy U.S., a Sun Life Investment Management company that is one of the top 20 largest real estate investment managers in the world.