Tuesday, April 14, 2015

What Do Millennials Mean for Commercial Real Estate?

We've been reading a lot recently about millennials, and what their preferences and the size of their cohort will mean for residential real estate over the next few years.  They aren't buying homes as soon as their predecessors did, nor do they seem as wedded to the concept of home ownership as earlier generations were.  In addition, they don't seem inclined to tackle "fixer uppers", and they are very clear about their expectations in housing.

I was at a meeting recently, where someone was bemoaning the fact that there were so few millennials, and that they weren't forming households quickly enough, or having children soon enough, to improve the sales of homes in the short run.  Someone else at the meeting commented that this new generation might never buy as many homes, but added that it didn't matter, as long as we turned our attention to investors.  Investors know that everyone has to live somewhere, so they are out scouring markets for property that can be rented to the millennial group.  Given their desires, those properties may well have to be gutted, or at least retrofitted, in order to provide the amenities necessary to attract renters. 

People always say that fortunes are made by finding products that fulfill a hole in whatever market is being discussed.  Well, here's one.  Investment real estate, anyone?

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