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Millennials are Changing the Face of Commercial Real Estate

As of 2015, millennials have officially taken over – the workforce, that is – and just as their generation has changed the way we think about how we work, it’s had a substantial influence on where we work as well.

Driven primarily by millennial working habits as well as their recreational and travel activities, we’ve seen many changes to commercial real estate that will without a doubt shape how we look at physical office space over the long term.

Flexible office space is no longer just a buzz word – it’s a millennial must-have

Bottom line? Millennials want to work from home. Or from wherever they happen to be, whether that’s halfway around the world, or across town.

The results of Deloitte’s Millennial Survey proves this point, and concludes:

  • Around half of all millennials currently have the option of working remotely
  • Most would like to if they don’t already have that option
  • 75% think that telecommuting would be beneficial to their productivity
  • 88% would like to be able to set their own, or have flexible hours
  • Most would prefer not to commute or would like to work at home or closer to home

These results, and this direction shows a growing trend towards the inevitable: there is already far less need for commercial office space than any time in recent history, and in the near future, there will be even less.

With an increased focus on outsourcing to freelancers or hiring outside of geographic boundaries, new companies, or those who are scaling up, won’t necessarily need more real estate. In fact, it’s likely they may choose to downsize.

Ditching the commute

Another factor affecting the change is the modern aversion to long commutes. A much smaller proportion of millennials today holds driver’s licenses than they did in the 1980s, for reasons that range from delayed marriage to more time spent in educational pursuits, or even some still living at home with their parents. There also seems to be a largely negative view of cars in general, in part due to emissions and environmental factors, but also (in urban areas) due to increased traffic, lower efficiency, and less convenience. From this we can conclude that, as it applies to commercial real estate in any case, millennials would prefer to stick closer to home, work remotely, and avoid commuting for work if at all possible.

So, how does this factor into commercial office space needs?

The very nature of millennials and the technology they embrace pre-supposes a few very important points:

  • Telecommuting is the new normal
  • Cloud connectivity and the flexibility it brings is supporting this trend
  • More millennials are choosing to start their own companies, become a freelancer, or work remotely
  • Their social lives are far more important to them than spending time in an office

There’s more, but you get the idea. To that end, it’s no secret: flexible or shared office space is becoming exceedingly popular among the world’s most dynamic companies. Open-concept offices or coworking spaces support this sensibility, providing millennials with ergonomic options that appeal to their need to be a part of something greater than themselves.

How the office sector can meet this need

As this trend continues to grow, we can expect a lessening demand for traditional commercial office space. However, even those millennials who choose to be entrepreneurial find that working in proximity to others who are doing the same is both stimulating and inspiring on a level that they can’t get either at home or in a conventional office setting. If this continues to be the case, and there is little reason why it shouldn’t, owners of commercial office space may want to appeal to this demographic by providing an office venue that hits all the millennial high points:

  • Close to more populated areas and accessible to mass-transit in order to reduce the commute
  • Provide open-concept work areas with flexible accommodations
  • Offer a social atmosphere that fosters interaction
  • Support them with next-generation technology and enhanced capabilities
  • Ad-hoc office space and meeting rooms on demand
  • Focus on millennial priorities, such as environmental awareness, green initiatives, and sustainable energy (think solar-powered buildings with plenty of green space)
  • Making a positive contribution to the community and to society in general

While some of these ideas may seem a bit esoteric in terms of the current state of commercial real estate, they are important points to consider in the pursuit of gaining an audience with the burgeoning millennial workforce. Somewhere in there lies a place of compromise where all these things converge, providing value and a great benefit to everybody involved.

Office Suites Strategies: Helping CRE Owners Offer Solutions for the Millennial Age

If you would like to learn more about Office Suites Strategies or find out how we can help your commercial property, give us a call today.