I recently had the pleasure to be on a panel for Minnesota Commercial Real Estate Women’s annual Crewcast. With multifamily projects dominating a lot of the news and the commercial real estate industry in the Twin Cities, it presented a great opportunity to speak about the past, present and future of the sector. Read my thoughts on past and present trends.
Who Will Our Renters Be?
Baby Boomers, those born from around 1946 to 1964, and empty nesters will shape how market rate apartments are built. As the Baby Boomer generation continues to shift towards renting instead of owning, developers and designers will begin catering apartments and their amenities to a broader crowd. Currently, we’re seeing that larger units are popular amongst empty nesters coming from a large home and not willing to squeeze into 1,000 square feet or less. It is expected that the Baby Boomers will have a significant impact on real estate development for the next two decades.
Sometimes considered the forgotten generation, what will generation X, born between 1965 and 1980, want? Will we see a trend similar to the baby boomers and empty nesters with a large shift from owning to renting once their children have moved out?
Born from 1981 to 2000, millennials are generally considered not yet ready to own and will continue to rent and demand the live, work, play lifestyle that multifamily provides. They like no risk and the flexibility to move for employment with ease. They will continue to be attracted to simplicity.
What trends will come from generation Z, those born since 2001, that will sway how new multifamily developments are designed and built? How will my children dictate how we design and build multifamily? Being immersed since their birth in technology, this generation will be the most technologically and socially advanced of all generations.
What Trends Will Drive Future Development?
With cars that drive themselves on the horizon, will we be living closer to the Jetson’s age and the predictions for the 21st century? Similarities from the Jetson’s certainly have played a part in the amenities expected in multifamily today, including
- video calls (FaceTime),
- treadmills (fitness centers),
- home computers (lap tops and tablets),
- the internet (wi-fi throughout the building and interactive workouts),
- microwaves and more.
Will we see more amenities in the kitchen, including push button meals? We already have people movers in airports. Will we see them in multifamily?
The Minneapolis Central Business District will remain hot. People will still want to live near services, entertainment and employment. They’ll still desire walkable communities with easy access to its amenities without the need for a car.
Many questions remain in what will shape the future of multifamily, including:
- Larger or micro units?
- More or less amenities?
- Luxury or affordable?
- High rise or stick built?
- Purchasing condos or renting apartments?
But there are trends we can most likely predict, including the following:
- construction costs will continue to rise, and skills labor will be increasingly hard to find;
- people will look for convenience;
- amenities will still be in high demand;
- live, work and play balance will remain;
- location will continue to be a driver;
- transit will play a factor;
- green roofs and sustainability will increase;
- prefabricated (modular) units and building components will be used more;
- well-crafted, simplified facades will be the norm; steel stud midrise structures will be common;
- the need for affordable housing will remain and
- closet space will still matter!