The Impact of Millenials on Real Estate

Back in November of last year I cited a study by CBRE that seemed to debunk several myths about the Millennial generation and the office environment. The essence of the study was that while Millenials had certain preferences and attitudes about the workplace, in general there was little difference between the generations about their desire for workplace flexibility, preferences for urban settings, more collaboration, and more autonomy.  However, in a recent article about Millenials in the March 15 issue of Fortune magazine, the theme of the article is about how to attract and retain the Millennial generation. This is a different question than the focus of the CBRE survey, and it raises questions about how Millenials will influence the locationand layout of office space as a way to attract the Millennial worker. As a reminder, Millenials are defined as those born between 1981 and 1996.

I’ve written about co-working as a good model to define the Millenial preference for workplace location and design. Specifically Millenials   first and foremost  demand flexibility in the workplace. This would mean that Millenial workers would be offered maximum flexibility in where and when they work. In essence Millenials wantmaximum work/life balance. The Fortune article quotes an HR executive from PWC who said that their surveys reflected that95% of their Millenial workforce demanded workplace flexibility and that  a quarter of the Millenials surveyed said that their work/life balance was still difficult to maintain, despite policies that offered telecommuting, flexible work schedules, and other practices aimed at improving work/life balance.

Millenials prefer urban locations for both living and working. Thus, corporate real estate executives should consider urban locations for future office sites to attract the young professional worker. Urban redevelopment in most major cities has been prompted in part by the MIllenial demand for funky urban settings. This is particularly true for such urban markets as Silicon Alley in New York and the South of Market development phenomenon in San Francisco.

Another key to the Millenial demographic is the high value they place on environmental issues. Millenials are motivated by a sense of purpose, and one key value that they would look for in an employer is the commitment to sustainability. Maintaining high environmental standards in office design and operations will be a plus when recruiting Millenials.

The Millenial generation has little patience for hierarchy and status. This attitude suggests that office design needs to reduce the traditional focus on hierarchy as a measure of office size or type. Enclosed offices are becoming obsolete, and even CEOs now opt for an open office to project an egalitarian and non-hierarchical image. In many cases, non assigned workstations have become the norm, where office workers use reservation apps to reserve a workstation or conference room. The Millenial generation is highly tech savvy and thus, offices must be equipped with the latest in network technology to include WiFi, broadband connectivity, and high speed printing capabilities.

Perhaps the single most important variable in the Millenial workplace conversation is the notion of corporate culture. The Fortune issue cited above which focuses on the 100 best companies to work for, cites corporate culture as the most important variable in attracting the young professional. Workplace design goes a long way in establishing and sustaining a corporate culture.  Thus, how a workplace is laid out, its décor, its perks suchas health facilities and food courts, and its focus on collaborative spaces all taken together reflect a culture of teamwork, purpose, and wellness, all values that are important to Millenials.

The corporate real estate manager has a critical role to play in attracting and retaining a quality workforce. And the primary target of these new recruits is the Millenial. Thus, designing a corporate real estate strategy that is Millenial friendly should be a top priority for corporate real estate.