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Real Estate Journal — Mid-Year Review — June 23 - July 13, 2017 — 19C
M id A tlantic
A ccountant
By: Adam Holzberg, CPA, MBA, Sax LLP The impact of Millennials on the real estate market
T his year, the millennial generation surpassed 74.9 million baby boom-
owners take a close look at what they offer this generation of renters and what changes need to be implemented to ac- commodate their needs. It is expensive to replace tenants, and upgrading existing apart- ments or including updated amenities in new developments can help retain tenants and keep properties competitive with other apartment com- plexes. Location, Location, Location The old real estate adage “location, location, location” still applies. One of the tougher yet most important benefits
for property owners to provide is a complex within walking distance to public transporta- tion, shopping, dining and en- tertainment. Millennials over- whelmingly prefer spending money on experiences rather than material objects. It is no wonder then that the growing trend among this generation is to move to areas or towns that can provide urban life experi- ences. According to a Nielsen sur- vey, millennials are living in urban areas at a higher rate than previous generations. 1 However, according to a CBRE
study from 2014, a shift in this trend may be starting to occur. According to the study, there was net migration out of the city and into suburbs for all millennial age groups. 2 As millennials get priced out of the urban areas, other towns that mimic the experience will attract attention. Many millen- nials are trending away from car ownership and seek the ur- ban experience of walkability. Lively downtown areas with plentiful shops and restaurants as well as accessible public transportation will attract millennial growth. Develop-
ers should identify towns with these characteristics as not all millennials will be able to live in New York City, Hoboken or Jersey City. Future of Homeownership Over the past several years, apartment living has been on the rise and homeownership for young adults has reached historic lows. The looming question is whether millennials will become homeowners in the near future. While there is no clear an- swer at the moment, signs point to an eventual yes. Cur- continued on page 20C
ers to become the nation’s largest liv- ing genera- tion. As ev- ery business owner knows, c omp a n i e s must adjust their strate-
Adam Holzberg
gies for how they approach and sell to individuals whose needs and preferences differ from previous generations. As most millennials are now in their post-college lives, the real estate industry has seen a massive influx of new potential tenants and homeowners who are already leaving their mark. It’s no secret that since the Great Recession, millennials have been burdened with large amounts of student loans and a poor selection of job prospects. While nearly a third of them decide to move back home after college, many others opt to rent with roommates, combining their funds to afford residences that suit their needs and life- styles. In the past, preferences may have been just a pool and/ or gym; however, millennials have higher expectations. Not their Father’s Amenities Amenities such as complex- wide Wi-Fi, plentiful electrical outlets (both in the apartment and outside), excellent cell phone coverage and large open spaces suitable for work or ex- ercise have become standard features that millennials seek. Additionally, many millennials are pet owners, and in order to cater to them, property owners must allow pets in units. Those who include dog parks will set themselves apart even more. Millennials also tend to seek amenities that maximize con- venience. Apartments that include laundry machines in units, online rent pay and maintenance requests, or even specialized amenities such as valet trash will seem more appealing than those that do not. This generation is increas- ingly using bicycles as modes of transportation or simply for pleasure. It is crucial that a complex provide either a bike rack or storage unit, as renters prefer not to store bikes within their units. While these are merely a few potential amenities that cater to millennials’ expectations, it is important that property
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