While virtually every industry has embraced technology in recent years, as well as the changes and advancements that have come along as a result of innovation. However, there seems to be one industry that, for many years, has remained steadfastly old school — commercial real estate. Historically, the big players in commercial real estate have been in older generations and demographics and, therefore, comfortable with these old school (more traditional) ways.
However, this may no longer be the case with Millennials and Gen Z continuing to infiltrate the commercial real estate industry — and they are bringing their technology with them. As a result, commercial real estate is responding to the industry age gap and the changing preferences in the workplace environment, and it’s easy to see that Millennials and Gen Z are already driving change throughout the industry.
One way the Millennial and Gen Z generations are driving change is in the talent pool. A recent Commercial Member Profile of the National Association of Realtors reported that the median age of commercial Realtors is 60 years old. As a result, this dynamic is pushing CRE firms to recruit and hire younger talent — and, when it comes to what employees are looking for, it comes as no surprise that these generations have different expectations and ideas than their predecessors.
With this in mind, let’s take a closer look at 4 ways Millennials and Gen Z are changing what we know about CRE.
1. The ability to work remotely
More so than any generation before them, Millennials are asking for the ability to work remotely. According to the 2017 Millennial Survey by Deloitte, 75% of Millennials want the ability to work remotely — and for a variety of reasons. Given the fact that Millennials are now the largest generation in the workforce and are taking higher level positions within organizations, we predict that it’s only a matter of time before working remotely becomes a reality across many, if not most, industries.
While there are various studies supporting both sides when it comes to the argument of whether or not remote work increases productivity, there is no denying that Millennials and Gen Zers are driving the demand for flexibility in their work. But what does this mean for commercial real estate? Simply put, as remote work becomes more mainstream, companies will simply need less physical space for their employees — meaning that demand for traditional office centers and complexes could drop, as organizations take a step back to reassess their space needs.
2. Redefined needs in physical workspaces
Even when Millennials and Gen Z aren’t working remotely, they have different ideas when it comes to workspace needs than previous generations. From office spaces that focus on a collaborative environment to creative, experience-based retail concepts, these younger generations are pushing the commercial real estate industry to completely rethink how physical space is used, more than ever before.
Open concept office spaces are the most obvious and well-known example of this, but it doesn’t stop there. Nordstrom has a storefront in Los Angeles that carries no inventory — an excellent example of how even physical space needs are evolving in the retail sector.
3. Increased fluency in technology
To date, Millennials have been the most tech-savvy generation in the workforce — however, this is quickly changing as more members of Gen Z are joining the workforce. As these generations join the ranks of CRE professionals, the industry will continue to speed up their embrace of technology, and employee tech fluency will also increase.
As a result, many CRE brokerages and firms will be tempted to rush into the “latest and greatest” technology. And while the right technology does make all the difference, it’s important to make sure that all employees are provided the opportunity to learn and adopt these new advancements.
4. Future Leaders
Today’s edgy innovators will be tomorrow’s C suite leaders. And with that comes an entirely new level of thinking and a new way of conducting business. An important part of leadership is understanding that the business world is changing — and that it is changing rapidly. In order to remain relevant and effective, the most valuable investment that we can make as an industry is in the development of these future leaders today — in order to have great leadership tomorrow.
When we invest in the leadership of the future, we are ensuring that we will be able to keep up, both with new technologies and with increased interdependence and interconnection. And to make sure that we have those necessary skills in the future, we need to start cultivating this leadership today.