In Focus: Doing Business Without Talking — Millennials’ Impact on CRE
Those involved in corporate real estate are increasingly adopting a digital approach to conducting business.
By and large, millennials don’t want to talk to people. They want to use an app, a mobile website, texting, Snapchat, or any of a multitude of other means to communicate digitally. And who can blame them? Texting is more efficient. You don’t get put on hold or find yourself trapped in a long, unproductive conversation. While waiting for the other party to respond, you can work on other tasks, and there’s typically a complete record of the conversation saved if you need to refer back to it.
What’s more, millennials don’t necessarily need a physical place to experience a connected community. My youngest son (post-millennial generation Z), for instance, is happy to stay in his bedroom with his headset on and connect with his friends digitally — no hanging out at the mall…no hours-long phone calls with the girlfriend…just a never-ending stream of snaps.
The New Norm
Tech over talk is the new norm, and this norm is making its way through commercial real estate as this generation ages and rises in influence and power. It’s already started with student housing, it’s moving into traditional multifamily, and eventually will change how commercial deals will be done.
Millennials’ strong preference to shop online has been like a steroid shot for the growth of the supply chain, and that growth has resulted in much larger distribution centers. That’s because millennials’ expectations for a digital experience in their personal lives carries over into the professional sphere, and as they ascend into management, their preferences will come to define the table-stakes for desirable office space and industrial facilities. In fact, on the deal side, we’re just starting to see accelerated technology adoption. And in smaller organizations like medical or law offices, millennials are likely to manage their businesses in a similar way to how they manage their home lives. So, over time, as bosses, millennials are going to expect to get most real estate business done without jumping onto a conference call.
Impact on Industrial Real Estate
Although millennials do not yet comprise a significant portion of upper management, their preferences are already having an impact on industrial real estate. As consumers, they’re shaping the design of these facilities. For example, millennials’ strong preference to shop online has been like a steroid shot for the growth of the supply chain, and that growth has resulted in much larger distribution centers. Further, those warehouses are following the millennials back to the city center, as same-day delivery, including automated delivery notifications, is the growing expectation of the city-dwelling millennial. Expect these trends to continue as millennials begin to climb their version of the corporate ladder and have greater influence on corporate behavior.
By and large, corporate real estate has traditionally been a people-centered business that revolves around personal relationships. While that is not going to change, the channels we use to forge and maintain those relationships and the tools with which we do business are changing fast. Organizations that don’t adopt a digital approach will find themselves left behind, simply talking when no one is listening.
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