SAN FRANCISCO—“Young adult population boom has fueled the apartment sector, and that boom should extend another decade… It has been one of the big demand drivers. A big part of the story is that we have so many young adults in the prime renting age renting a good chuck of those apartments.” So said Jay Parsons, national market analysis manager of MPF Research, who served as panelist of a PCBC session titled: “Not Our Parents' House,” a panel about who are Gen Y renters and what do they want?
According to Parsons, it is very hard to figure out this generation. He pointed out that the Millennial population has been slower to marry and become financially independent and they express less interest in “worldly” goods. Whether this is a result of the Great Recession, a change in values, student loan debt, or difficulties in finding well-paying jobs, it's vital that we learn how these consumers will affect the economy—and real estate—in material ways,” he added. “We see all these contradictions about this generation; it is diverse group that is very complicated.”
According to Tyler Washburn, a designer at PRDG LLC, the urban setting is a key part, but he says that a developer doesn't need to over-provide when I comes to amenities, because everything is just outside and down the street. “As long as you have the big common spaces for people to hang out…it is about being alone in a crowd…the coffee shop mentality.”
The big thing that is becoming more and more of a critical amenity, he said, is a place for pets. “Pets are our kids these days … Having a place to take your pet to the bathroom is nice to have.”
Another amenity Washburn said is good to capitalize on when you can is having a pool. “People want to socialize around a pool and if you can provide it, people will use it all the time.”
Kara Wiard, a managing director at Eastdil Secured, pointed out that “The less square footage, but with an open floor plan, is what this generation wants. They are willing to pay for smart design and higher-end finishes even if it means less square footage in their unit.”
According to Washburn, “Millenials are more concerned about where they live, and then the price point comes second. It isn't that we prefer smaller units… it is about what we could afford.”
When moderator Parsons asked the Gen Y panelists about whether or not they would pay for LEED certification and if was important, panelists agreed that as long as the cost was hidden, it was ok. “It is more of an expectation than something that they are willing to pay a premium for, especially for new product where they are paying top dollar rent,” added Wiard. “It is more of a baseline as opposed to something they would incrementally pay more for.”
Washburn said that hiding that cost is key. “No one wants to know that they are paying for that. And the general population has no idea what LEED is… The renter doesn't know what that stamp is. Inspections now are almost $2,000 a unit.”
When talking about new trends with operating and managing apartments, in terms of face time with someone who works at the property, panelists agreed that it isn't necessary, and is not preferred. “In general, people want to have maximum efficiency…email or texting as much as possible,” said Wiard. She pointed to maintenance requests online, packing alerts or laundry notification texts as examples. “As an owner, show off your technology at the onset so renters have that comfort level that their apartments are maintained as efficient as possible. It is about efficient ways of managing.”
A website is key in urban areas, to help establish a brand and get the target resident, said Wiard. “It is important to project the right image for the lease-up and integrating the neighborhood amenities.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
