What do Millennials, the laidback digital natives dubbed \u201cGeneration Me\u201d by social scientists, have in common with the driven, disciplined Baby Boomers who spawned them? Quite a bit when it comes to lifestyles. As Boomers downsize and Millennials finally enter the real estate market, both generations are gravitating towards the same type of housing : multifamily homes in vibrant urban areas.<\/p>\n
Ironically, Boomers are opting out of large, high-maintenance homes at the same time their budget-conscious Millennial children are finally buying first residences. Both generations want smaller dwellings in culturally rich cities and suburbs, with restaurants, shopping, services, entertainment and public transportation nearby, notes realtor.com. Multifamily condos fill the bill for both groups.<\/p>\n
Yet while each generation has broad similarities, they also have distinct differences. Since both cohorts dominate the multifamily housing market at the moment, notes the National Association of Realtor, builders and developers need to be spot-on in the multifamily housing they target to either age group, and strike an inspired balance of features and amenities in those designed to appeal to both.<\/p>\n
Easier said than done? Not in the age of big data. From the analytics-driven research we do at ON Collaborative to understand what resonates with each market segment, it means taking a deep-dive into each generation\u2019s wants and needs to develop hyper-local business plans that maximize each project\u2019s sales velocity and price.<\/p>\n
Here are the most salient issues multifamily developers must keep in mind as they design and build their offerings.<\/p>\n
Know Each Generation\u2019s Pleasure and Pain Points<\/strong><\/p>\n Each generation places different demands on multifamily developments. It\u2019s more than a matter of tweaking unit size or making interior design features, common spaces and amenities as impartial as possible. It\u2019s critical to assess what each cohort needs and develop a site-specific mix of elements for each project.<\/p>\n To date, multifamily developers have relied on snazzy Wi-Fi lounges, complimentary gourmet coffee bars and lush community gardens to seduce both cohorts. It\u2019s time to wake up. These features have gone from exceptional to conventional in the last five years. Instead, beefed-up basics and attention-grabbing extras now reign supreme. For both generations, the former means flawless internet reception, community directors, smart controls for HVAC systems, fitness studios to complement workout rooms, larger storage areas, state-of-the-art recycling, electric car charging stations and more. The latter\u2014the extras that dazzle and woo\u2014are singular to each community and analytics-driven.<\/p>\n But long before those extras come into play, we know Millennials and Boomers both favor open floor plans that foster flexibility and interpersonal connectivity; high quality fixtures and finishes\u2014especially in the kitchen; lifestyle enhancing communal spaces and amenities; and pet friendly features such as dog runs and grooming areas. But Boomers favor traditional design features such as fireplaces and moldings; need space for hobbies and leisure activities; demand home offices that can double as guest rooms; and choose walkable communities with parks. Millennials, on the other hand, prefer sleek, unique design features; require affordability; prefer denser neighborhoods with edgy offerings; and need access to major transportation hubs.<\/p>\n Pay Attention To Each Generation\u2019s Values<\/strong><\/p>\n Despite their many similarities, Millennials and Boomers have different values that multifamily developers must take into account and reflect in their projects.<\/p>\n Take Millennials\u2019 vibrant lifestyle. It\u2019s not just about convenience and activity; it\u2019s an expression of their value for diversity and inclusiveness, according to PwC\u2019s Emerging Trends in Real Estate 2017. They want to be part of a vital community that feels welcoming, flexible and democratic, and where informal hubs anchor social life. And they covet new experiences rather than material possessions. So the more adventurous and unique an amenity, the better, according to our findings. Think game arcades, indoor rock-climbing walls, programming that ranges from out-of-the-box fitness classes to inspired happy hours, shared car services, fully enclosed work stations in common areas and fully-equipped music rooms.<\/p>\n On the other hand, we find that Boomers still place a premium on properties that reflect exclusivity. They value refinement and sophistication, and traditional markers of this quality include doormen, valet parking, concierges and elegant private lounges. Amenities that wow include limo shuttles, driving ranges, spa-quality fitness centers with services and saunas, on-call chefs and temperature-controlled wine rooms. Analytics can help developers determine the best options in each market.<\/p>\n Consider Each Generation\u2019s Resources<\/strong><\/p>\n Budgets are always a key consideration, especially since the disparity between these two generations is most evident here. But ultimately, neither cohort will buy places that don\u2019t have the features they covet.<\/p>\n For instance, even though Boomers are downsizing, space is still their holy grail. They want room to entertain, accommodate grandchildren and guests, work at home and pursue hobbies. They want and need larger units than Millennials\u2014and can afford to pay for them, along with top-shelf amenities that promote wellness, safety and reduce stress. Trending options include maid, laundry, meal and personal valet services; state-of-the-art gyms with personal trainers; tech-enabled smart lighting that supports natural circadian rhythms; and biometric security and alert systems.<\/p>\n Though Millennials have less money to spend, they\u2019re more flexible and adept at making trade-offs. They weigh unit size against other assets\u2014especially location and quality of amenities. Because Millennials love anything that\u2019s new and cool, they\u2019re willing to give up unit space if it means access to hot neighborhoods, major transportation hubs, smart appliances, state-of-the-art fitness facilities, doggie daycares, rideshare services and grocery delivery.<\/p>\n Know Each Generation\u2019s Commitment Level<\/strong><\/p>\n Here\u2019s where the generations differ the most: As homeowners, Millennials are at the bottom of the ladder and Boomers are at the top. To the former, a multifamily property is a \u201chome for now\u201d and an investment rather than a permanent commitment, notes Millennial Money. But for Boomers, this is often the last rung on their housing ladder. At or near retirement, they want multifamily units that will be permanent to avoid the hassle of moving again. And that means buildings with the services, facilities, amenities and units that will allow them to age gracefully in place and maintain the independence they prize.<\/p>\n Despite the two cohorts\u2019 very different reasons for buying, units that will \u201cwear well\u201d and can be adapted to future tastes are essential\u2014and achievable with analytics that gauge each development\u2019s target market, geographic requirements and mitigating trends. And while pleasing both cohorts in the same project can be a balancing act worthy of the Cirque du Soleil, it too is possible with an analytics-driven approach. It takes precise data and astute analysis to consistently strike the right balance between the inclusive, informal community spaces that Millennials prefer and the more exclusive and refined facilities and services that resonate with Boomers.<\/p>\n