Commercial real estate must respond to the needs of Millennials who are starting families and building careers while Baby Boomers retire and age. Properties are needed to meet both generations’ vastly different desires and lifestyles. Saddled with debt, Millennials are much slower to buy homes than previous generations. They are more likely to rent, requiring an increase in multifamily units. They want walkable, livable neighborhoods. Baby Boomers will be looking to downsize, and some will relocate to warmer climates for retirement living.
Technology use clearly shows the generational divides. This impacts how they use commercial spaces. Online shopping has replaced visits to big-box stores and malls. Some of these retail sites are being transformed into mixed-use areas that include entertainment attractions and restaurants; some properties are experimenting with including residential spaces. Expect the repurposing of retail space to continue. But while the rise in online shopping has emptied malls, it’s created a surge in the need for industrial spaces as distribution centers become more necessary for retail operations. Parking garages can also be repurposed, as more drivers turn to transit, cycling, or walking, or as the increase in remote work makes large parking lots redundant.
The rise in remote working situations also changes office buildings. Shared workspaces will continue to be in high demand as many want to work in smaller buildings with communal spaces. Emerging industries, such as data analytics and artificial intelligence, each bring their own retail opportunities as well.
Contact me to discuss how these trends might impact your future commercial real estate investments and what opportunities might be available in your area.