Now well into their late 20s and 30s, Millennials are in their prime spending years as the largest generational cohort. The Motley Fool estimates that by 2020 Millennials will have a collective spending power of $1.4 trillion and will allocate up to 45 percent of their income on rent. With thousands of studies and articles written to analyze and anticipate the needs of this complex generation, it is now universally understood that Millennials will reshape multifamily redevelopment—even more than they already have. Here are six considerations for redeveloping multifamily and keeping the Millennial in mind:
We’re seeing Millennials gravitate toward communities with a ton of character. For example, The Tennessee Brewery, an adaptive reuse project located in downtown Memphis, had been empty for nearly 30 years when the development team led by Billy Orgel decided to take on the redevelopment. Dating back to the 1870s, the historic Romanesque Revival structure housed one of the largest gravity breweries in the region until the 1950s. After years of vacancy and threat of demolition, Orgel’s team stepped in to save the historic building in 2014, which now holds 148 apartments managed by Fogelman. To Millennials, The Brewery’s units tell a story. The homes with exposed brick, large, deep window frames with masonry sills, soaring ceilings, splashes of graffiti and industrial remnants are of most interest to renters. Albeit unconventional and diverse, the community has old world style, charm and character. The result? The once-blighted Tennessee Brewery reached full occupancy in record time.
Today, we live in a world shaped by a sharing economy—crowdfunding, crowdsourcing, ridesharing, you name it. The same applies for space, especially with Millennials. As open concept, flexible work space has taken hold in the commercial office world, multifamily is taking note in creating spaces that are capable of doing double or triple time. Community rooms are being transformed from having single designated uses to serving as flexible multiuse spaces to accommodate different needs at different times. Years ago, a community would have separate tennis courts, basketball courts and racquetball courts. In redevelopment, we’re now converting those spaces and combining them to flexible multiuse workout spaces. Coupled with on-demand virtual training that delivers fitness classes to users anytime, anywhere. Residents can now enjoy the flexibility of use with a space designed to host a core or yoga class, CrossFit session or spin course.
Moving into 2020, Millennials desire flexibility not only in common areas but in resident units. Specifically, we’re seeing a shift from closed off, formal rooms to open-concept floor plans that allow plug & play for different concepts while accommodating multiple life and family stages. For example, the formal dining room with the classic chandelier lighting is considered all but dead in redevelopment. Residents prefer the blending of functionality and entertainment with the kitchen opening up to the living room or the dining room doubling as a study.
According to recent studies, Millennials (ages 22 to 37) make the majority of their purchases online. More online shopping means more resident packages, and a bigger burden on onsite teams. Apartment communities are now charged with holding and handing off packages to an estimated 39 million apartment residents every year. We’re now outfitting almost every newly-acquired community with a secure package room, complete with shelving units, one-time entry code keypad access and cameras for security. We found that lockers were often too confining for large or unusually-shaped parcels after much discussion with onsite teams and local package carriers.
With the pending 2023 launch of Uber Air as a shared air transportation service and the use of drones for package delivery, multifamily will need to pay close attention in the coming years. Some developers, especially in larger cities, are planning to outfit their mid-rise communities with helipads to accommodate resident air travel and advancements in drone technology.
Millennial residents are increasingly looking to bridge indoor and outdoor living by infusing the convenience and comfort of indoors with the relaxing, spacious feel of outdoors. The result? Communities are planning “outdoor escapes” in redevelopment. We’re now rethinking how to use pool deck space in offering soft seating for reading, outfitting pools with outdoor kitchens for family-centric entertainment and seamlessly connecting the indoors with the out. Access to green space (though not necessarily owning it) is also a must have for millennials as they are willing to share community gardens and greenery.
While Millennials certainly love the outdoors, their furry family members are now the center of attention in amenity redevelopment. Dog parks have grown legs these days as residents prefer pet-friendly communities. In the last five years of redevelopment, we’ve shifted from simple, small-scale bifurcated dog runs to complex K9 obstacle courses and pooch parks with bench seating and night lighting for the residents. Lack of placemaking for pets in a community can be a real problem for Millennial renters.
To understand what’s important among Millennial renters, it’s best to look at what is not working for them.
Espresso cabinets are on their way out as lighter color palettes make a comeback thanks to the growing desire for a brighter, more open apartment aesthetic. Lighter colored countertops are also high on the must-have list for millennial renters.
Say “goodbye” to beige walls as grey takes center stage as the neutral of choice in rentals. The transitional color takes a room from casual to luxurious, without sacrificing comfort.
Incandescent lighting is often a no-go as Millennials are focused on sustainability and prefer energy-saving LED lights over traditional bulbs. They also want mobile ready smart-home control over the thermostat to conserve on both energy and budget. For long-term investments, we’re turning to LED conversions on both interior units and on exterior fixtures such as the clubhouse and in parking lots.
While Millennials may be “unattached” and a more mobile renter base, the “first in and first out” residents will continue to play a crucial role in the multifamily consumer base. Catering to the desires of today’s Millennial consumer is a practice in adaptability as change is the only constant in the multifamily industry.
David Nischwitz is senior vice president Redevelopment for Fogelman Properties.