The Millennial generation is having a major impact on the global economy today. As more and more Millennials graduate from college each year and join the workforce, their ideals and methods for working are continuing to change the overall professional landscape.
One industry that is bound to see a major change in the coming years is the commercial real estate industry. While people were initially unsure of how this generation would inevitably influence the industry given their reluctance toward investing in residential real estate, we have begun to form a better idea of how the industry will take shape as Millennials’ come into their own. The industry after all traditionally has had a high percentage of younger workers.
Changes to Networking
One of the main ways that the Millennial generation is changing the commercial real estate industry is by changing ways that professionals in the industry interact with each other. Traditionally, forming professional relationships took years of networking, having coffee, and meeting up at conferences. Today, the younger generation is more than happy to speed up these processes through the use of social media. While there is still a need for phone calls, and live meetings, social media has allowed a relationship to form much faster than before. We can expect this change to influence how we recruit as well. As explained in this Deloitte report, “As real estate and construction (RE&C) companies adapt to today’s dynamic digital environment, they must also confront a unique and challenging talent situation. The workforce is becoming increasingly diverse by generation, gender, and other demographics. At the same time, it is increasingly working side by side with machines in a more hyperconnected and global environment.”
Correspondence with Customers
Those who are concerned about the less personal touch that goes on between professionals in the industry also will likely be bothered by how younger professionals handle client relationships. While there will always be a need for salesmanship and live meetings, younger professionals are far more concerned with getting a customer data and results as opposed to fostering relationships. The customer is also changing in the digital age though and tech opens the door for expedited processes that will ultimately entice the customer.
The commercial real estate industry will also be transformed by how Millennials will view new construction and renovation projects. This will include making sure that properties are built with the environment in mind, which will likely lead to an increase in LEED-certified projects. There will also be a lot of push to use technology as much as possible, which can include having sophisticated building automation services and security systems installed into all new properties.
Residential Real Estate
One concern that plagued commercial real estate investors is how Millennials will affect residential real estate. This generation has seemed to be less concerned with owning a home than any prior generation. This could end up causing a supply and demand shift if the younger generations do not increase their rate of homeownership. This generation is also less likely to shop in a traditional store environment, which could transform the retail real estate industry.
That being said, the numbers show an increased interest recently. As David Smooke says, “While Time’s infamous “Me, Me, Generation” coining may remain at the top of our newsfeed, the millennial’s desire to own a home remains high. Commercial real estate sellers will have to cater to rising demographic of millennial buyers, where we’ve seen the first wave in the residential space.”