As any commercial real estate professional will tell you, the industry has been witness to a number of changes—being subject to the impacts of the economy, industry trends, market challenges, and more. When looking at commercial real estate, it is crucial to focus not only on generational activity, but also on lifestyle trends.
Obviously, Baby Boomers are the driving force behind a number of changes shaping the CRE landscape today. As these consumers are aging, they are paying close attention to where they will live—and where they will retire. The option to “age in place” is pushing a huge shift in the traditional retirement community space, readily impacting the commercial development business.
Another huge trend in CRE, known as lifestyle CRE, is taking shape and effectively changing the CRE landscape today. And while this shift has been touted as a Millennial trend, it’s actually anything but just Millennials who are behind this change.
Today’s consumers are paying close attention to where they will work and its relation to where they live. But what difference does this make? This focus impacts everything from transportation to how they will choose to spend their leisure time. Today’s residents are enjoying this new live-work-play lifestyle, and their purchase habits reflect that.
This trend doesn’t necessarily just represent people working from home anymore; rather, it encompasses people who choose to live, work, and play, all within a relatively small geographical footprint. As developer Christopher Brown told Multifamily Executive, “the reality of working these days is that, because of the technology, you can do it from anywhere, and people are actually doing just that. That holds for all demographics, age 18 to 85—whoever is still working.”
A recent Gallup poll reported that more than 40% of the workforce spend at least part of their time working remotely, a marked increase from even just a few years prior. And this is just the type of lifestyle that today’s workforce is looking for. Brown goes on to reference a particular client who was in the market to downsize. “He’s the epitome of what we’re seeing today: someone who wants to downsize from his royal lifestyle, forget the car, and walk down the block to his office. We are actively pursuing tenants right now to do shared office space, because that’s the trend that’s really transforming everything.”
While the idea of your entire life revolving around a small geographical area is certainly nothing new (after all, think about what people did before automobiles were as prevalent as they are today), it hasn’t been the norm for quite some time. However, this trend is rapidly reemerging to meet consumer demands and better fit their lifestyle. People no longer work the standard 9-to-5 job or punch a timecard. In fact, that hasn’t existed in quite some time—and today’s real estate trends are proof that people are living and working differently.