Special Report: Commercial Real Estate Millennial Shift, Part 1
At one time Mark Toro was your traditional big retail developer. But after moving to Midtown and watching his Millennial daughters grow, Mark knew that commercial real estate was about to radically change. And it's the impact of this largest American generation since the Baby Boomers that Mark will probe next month during our Atlanta's Millennial Revolution on Nov. 19 at The Buckhead Theater, starting at 7:30.
“I had my own personal experience coupled with my own children and their friends,” Mark tells us. “And I realized the business we were in was over, never to return.” North American Properties, along with many other developers, have certainly embraced the new realities of Millennials in both the workplace and out in society—from office to apartments to retail, the impact is quickly changing the landscape and skyline in Atlanta. Here's some things we know about Millennials from some recent studies (here and here):
- While making up a third of US population, this group (ranging in age from mid-20s to mid-30s) is also the most technologically adept generation in history.
- Millennials have more college degrees per capita than any other generation of young adults—47% of those 25 to 34, with 18% having completed a post-secondary degree.
- They're also the least likely to be married—just 26%, compared to 36% of Gen-Xers and 48% of Baby Boomers at the same age.
- Millennials have low levels of social trust: 19% of Millennial respondents to a Pew study say they trust other people, compared to 31% of Gen-Xers and 40% of Baby Boomers.
Millennials, of course, have been flocking back into the city to live, their preference being Atlanta's booming stock of apartments, such as Columbia Ventures' planned redevelopment of the Edgewood/Candler Park MARTA Station that is moving forward (here). Haddow & Co's most recent report says that rent growth among intown apartments was an impressive 8% over the past year, “and project's in initial lease-up are being absorbed at a pace well above historical averages.” Of course, with more than 11,000 new units soon to deliver, that demand is about to be tested. While Millennials are less likely to own homes than previous generations, the Council for Economic Advisors report notes that other factors may be coming into play for that—closer relations with parents than previous generations, a tough labor market coming out of the Great Recession, a tight lending environment coupled with low credit scores (67% of those under 30 have a credit score of 680 or less) and “rising student loan debt burdens are dimming home ownership prospects for Millennials.”
Still, Mark says for what he's seeing, an urban renting lifestyle is much more choice than forced alternative, especially since Millennials are marrying and starting families later in life. Even so, Mark questions whether there will be a mass exodus back to the suburbs once the Millennials do settle down. “You're also going to have a significant number of Millennials staying in town as families” as we're seeing in places like East Atlanta and Virginia Highlands. Come hear more from Mark and Transwestern's Reeves Henritze, Eastdil Secured's William Ross and MARTA's Amanda Rhein (here) at our Atlanta's Millennial Revolution on Nov. 19 at The Buckhead Theater, starting at 7:30. (tickets and info here).