The generation that’s been plugged into iphones and internet their entire life is turning the apartment market on its head with their socially conscious and community-oriented lifestyle.
Live-work-play, the buzz words of the latest cycle, are being overtaken by something as old-fashioned as bricks and mortar – community.
“Community is really important,” said Lesley Lisser, senior director, asset management at Invesco, which manages a multi-billion dollar portfolio of multifamily properties across the US.
Speaking at the 4th annual Women in CRE Symposium hosted by New York University Schack Institute, Lisser said, “We’re finding it’s old fashioned things that work. Our teams are focused on developing relationships with local vendors and making sure tenants get old fashioned things like discounts and coupons and making the community a part of where they live. We create events where they can make friends. This is stuff that’s been going on in multifamily for as long as I’ve been in the space and these old-fashioned things do work and you find that all of the residents appreciate it.”
The fusion of home, work and leisure space has been picking up steam as more and more developers attempt to read a market that has been undergoing dramatic changes as the biggest segment of the population moves into the home market – millennials.
Today, those born between the years 1981 and 2000 make up America’s largest generation, bigger even than the Baby Boomers. Where and how they choose to live is driving what experts believe will have a lasting impact on which cities rise and which recede.
As they work to attract and retain these residents, developers have deployed a range of amenity-driven strategies with a manifest that has been visited by everything from private jet service (111 Murray) to indoor skateparks (Waterline Square), bowling alleys (555TEN) to doggy daycare (MiMa) all while the size of apartments has shrunk to the smallest ever.
In the past 10 years, the average size of a new American apartment has shrunk by five percent to 914 s/f. According to internet listing service, RentCafe, the smallest apartments are in Chicago and Manhattan where they measure on average 733 s/f. This while rising construction costs and dwindling land supply has pushed rents up 28 percent.
But rather than driving everyone to the suburbs, research shows that millennials in particular are driving urban development to new heights, swelling city populations and pushing affordability to crisis point in many major cities.
In a first-of-its-kind study released earlier this year, researchers from Georgia Institute of Technology and the University of Illinois analyzed the net migration of young adults across the US and found that their hankering for city living doesn’t appear to be a passing phase as they place a premium on “consumption amenities,” like entertainment and culture, as well as transit access.
Over three quarters of all millennials would also rather spend money on an experience or event than hard goods, according to a 2018 study by Harris Poll. Most (69 percent) believe attending live experiences helps them “connect better with their friends, their community and people around the world.” In the coming year, 72 percent said they would like to increase their expenditures on experiences.
At 235 Grand in Jersey City, developers KRE Group and Ironstate Development introduced the most community-focused of their three-building partnership on June. With more than two thirds of its 549 apartments already leased and with half the property now occupied, the community building is well underway.