Whether you call them Millennials, Echo Boomers, Gen Y, or Gen Next, they are the almost 80 million young adults who were born (according to the U.S. Bureau of Labor Statistics) between 1976 and 2001. Many of them have already joined the workforce and many more will do so in the very near future. Right now, 36% of the U.S. workforce is comprised of this generation, and in six years they will make up nearly half of the U.S. workforce. While the generation preceding them, Generation X (or Gen Xers), make up only around 15 percent of today’s workforce.

These facts, coupled with the indisputable fact that most Baby Boomers will be retiring soon, means that Millennials will be making up not just the rank and file of a typical company’s employee roster, but will also be filling leadership roles.

It follows that employers are apt in preparing to meet the Millennials preferences in the workplace, and not just in relation to design, layout, rewarding system and amenities, but also their requirements regarding workplace location and availability to public transportation.

Millennials are very vocal is stressing how important it is for opportunities to live and work without relying on a car (86% agree in mature cities, 82% in growing cities, and 77% in aspiring cities). According to a recent report from The American Public Transportation Association , “…most Millennials rely on public transportation because of its convenience and environmental factor, the ability to digitally socialize, and the cost.”

Other reasons Millennials look for short commutes include their relatively high level of debt due to student loans and low income levels due to lack of experience and entry level positions.

A strong suggestion for every employer considering an office relocation or new construction is to put together a “New Office” advisory team that pulls member input from every level of the organization. The team should start work by conducting a company-wide poll to gather feedback regarding the planned move, allowing for engaged discussion at all levels of decision making. Meissner Jacquet Commercial Real Estate Services recently enacted an Employee Advisory Committee to gather feedback regarding company initiatives. “Ensuring that commuting options, and opinions in general, are included in the poll is paramount,” states Jerry Jacquet, a Principal with Meissner Jacquet Commercial Real Estate Services.

On the other side of the same coin, not less than 50 years ago, urban, commercial real estate markets became less populated due to the American dream of homeownership in suburban areas. With the popularity of car ownership and relatively cheap fuel costs, the workforce was willing to drive further to where they live, work and shop. As a result, commercial real estate – especially retailers – bought into sprawling suburban malls where the rents were cheaper because they were outside of city centers.

But now, things are shifting – due in part to the Millennials. The workforce is now veering away from suburbia in general and instead are drawn to the hub of a vibrant city, not only as a place to work and live, but also to buy. And when there, they tend to buy from local, independent retailers whose shops they can reach via public transportation or on foot. Temporary urban stores – from modern pop-up shops (think seasonal retailers, such as Halloween stores) to more traditional farmer’s markets – have also gained in popularity with Millennials. Because of these customers’ preferences, a larger number of smaller-scale retailers are locating their stores in city hubs with areas of dense foot traffic.

Another Millennials buying habit worth mentioning is purchasing online. In fact, online buying crosses all generations at a higher and higher level each year. As a result, warehouse and industrial space is in demand – and especially popular are buildings located in transport hubs such as the docks of a thriving city.

Given the positive outlook for commercial real estate due to the increasing demand in urban markets, both commercial real estate professionals and space occupiers alike would be smart to respond to their stakeholders’ requests and preferences – especially, it seems, those of Millennials. As stated in the APTA report, “By offering public transport incentives, companies can do their part for the environment, while retaining and attracting this younger generation!”

Sources:

Transportation for America

American Public Transportation Association

The Rockefeller Foundation

Meissner Jacquet Commercial Real Estate Services

With today’s rebounding economy and real estate market, the return of investment (ROI) from a commercial property can be substantial, especially for buyers who are entrepreneurs at heart and willing to take some risks. But keep in mind that owning commercial space, such as retail centers, industrial parks or office buildings comes with many advantages, as well as some challenges. To avoid potential pitfalls, investors must be prepared to do a lot of studying and be informed before purchasing.

There are many differences between owning commercial property versus residential property. But both property types encompass necessary ownership responsibilities, such as responding to maintenance emergencies and repairs, responding to tenant requests, maintaining service contracts, preparing operating budgets, collecting rents, performing lease oversight, in addition to other special or extraordinary services inherent to property ownership.

Some of the overarching advantages of commercial property ownership are longer leases, higher rents, faster property appreciation, and the potential for higher ROI. Depending on how risk tolerant of an investor you are, disadvantages can include higher capital investment (daunting for novice investors), on-going maintenance costs, insurance-related risks, vacancy rates, and strict compliance, zoning and planning laws. Specific types of commercial property also have distinct pros and cons.

Before you make the important decision to invest in commercial real estate, here is a quick study guide:

A. Make sure you have an experienced commercial real estate attorney or broker, licensed in your state, to look out for your interests. Commercial real estate agreements can be complicated as they adhere to strict, by-the-book legal proceedings. Do not try to maneuver this on your own or with an uninformed representative who is not well versed in every nuance.

B. Carefully choose the right type of commercial property. Among your options are:

• Retail space – such as, stores, restaurants or any place where people purchase goods or commodities.  Pluses: Potential for high yields, low maintenance, and long leases. Potential Minuses: Shifting customer tastes, higher initial investment and changing economic conditions.

• Office space – buildings with office users or tenants segmented into Classes A, B or C.  The spaces can include building amenities such as physical fitness centers, food facilities or child care centers.  Pluses: Longer leases, clearly identified operating hours, and tenants with an interest in the property’s appearance and operational performance. Potential Minuses: changing economic conditions, and large tenant base.

• Industrial space – such as manufacturing facilities, warehouses or storage spaces. Pluses: Potential for high yields and long leases. Potential Minuses: Changing economic conditions, lower rents and vacancy rates.

C. Strongly consider hiring an excellent commercial property management firm. Why? Because a commercial real estate investment is on a business-to-business plane, which means the stakes are higher. Your response to your tenants’ issues must be swift, thorough and professional. And you need an experienced company who can handle it all in an expert manner. And when we say ‘all’ we mean:

• Negotiating contracts for physical plant issues and vendor services, such as janitorial, landscaping, lighting, parking lot appearance, and maintenance systems

• Vendor contract services, including contract bidding and review to ensure cost-effective maintenance

• Construction Management that provides value through knowledge, negotiating expertise and organizational skills

• Rent Collection  and enforcement of leases

• Keeping up, through continuing education, all property laws, trends, and shifts

• Performing site inspections and reports

• Carrying out all necessary tenant, maintenance and contractor credit checks

• Tenant Response, including  complaint resolution

• Compliance to regulations and laws surrounding commercial property

• Energy Management & Sustainability Practices to reduce operating expenses by promoting energy conservation and efficiency

• Crisis, Safety and Risk Management, including prevention and management of disasters, adherence to safety policies, and verification of appropriate insurance levels

• Hiring and managing any necessary on-site maintenance personnel

• Accounting Reporting and Procedures, including annual budget preparation, accounts payable / receivable, general ledger recording, year-end audits, tax responsibilities, CAM reconciliations, and financial reports

• Adherence to business plan and goals

• Giving you peace of mind

Meissner Jacquet Commercial Real Estate Services, a San Diego-based commercial property management firm, provides three important things to property owners and operators, confidence, stability and relevant solutions.  Tim Meissner, a Principal at Meissner Jacquét, says that what sets their firm apart is that “we allow our clients to excel.  We’re in business to enhance the ownership experience by aligning our clients’ financial and business ambitions.”   Hiring the right commercial property management firm can add value, by saving you time, money (yes, money) and untold stress.

Sources:

National Association of Real Estate Investment Managers

National Association of Realtors