Millennials are the future of commercial real estate. Their spending, working, and lifestyle habits have impacted almost every industry – and commercial real estate is no exception. For sponsors, understanding this generation’s demands and expectations and adapting to those needs will be critical to successfully attracting and retaining Millennial investors.
Read ahead to learn about 3 trends that factor into how Millennials view real estate investing.
Access to Technology and Information
Millennials are the first generation to grow up with easy access to the Internet and with data at their fingertips. Having Internet access from an early age has shaped the way Millennials communicate, share and consume information, and conduct research. As a result, they have higher expectations than other generations about speed, accessibility, and transparency related to their financial investments. In fact, 3 out of 5 Millennials would be more likely to invest in real estate if there were technology available to make the process easier. Additionally, they are accustomed to having info, peer feedback, and recommendations readily available, right at their fingertips, and 71% of Millennials take these insights into consideration in their decision-making process, even with regards to investing.
The Demand for Social Responsibility
Social responsibility is no longer just a forward-thinking, aspirational goal for companies. Indeed, it has become a strategic priority to align goals with initiatives that promote the welfare of the planet. These measures promote a positive brand image, with 73% of Millennials stating they are willing to spend more on products from sustainable brands. As a result, sustainable practices are being more highly regarded by investors than ever before. They are increasingly viewing global sustainability challenges as central to a property’s long-term financial performance, driving them to seek more information about their funds’ environmental, social, and governance programs prior to making an investment decision.
Millennials are interested in real estate investments that drive social and economic change, such as mixed-income housing, community and healthcare facilities, and co-working office space. They are also more likely to invest in projects that strive to be environmentally-friendly and sustainable.
Non-Traditional Living Arrangements
For the first time since the late 1800s, young adults are more likely to live at home with a parent than in any other arrangement, as a result of Millennials increasingly delaying marriage, the rising cost of home ownership, and the pressure to pay off student debt. With recent college tuition hikes, student debt has doubled to over $1.4 trillion since 2009. Many Millennials feel the pressure to pay off their loans as quickly as possible instead of investing in the stock market, real estate, or sometimes even their retirement.
These are just a few of the factors impacting Millennial investors today and shaping the way they make decisions about investing. Forward-thinking firms can prepare for Millennials’ growing impact in the commercial real estate industry by considering an online investor and investment management platform, like RealPage IMS.