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How Millennials Drive Tomorrow’s Real Estate Trends
As Millennials in the U.S. settle into their 20s and 30s, affordable mid-sized tech hub cities, select city-center neighborhoods and close-in big city suburbs that offer short commutes and urban amenities stand to benefit, according to new research by TH Real Estate, an affiliate of Nuveen, the investment manager of TIAA.
TH Real Estate Research US’s Melissa Reagen says, “Our research indicates that both older and younger Millennials will eventually migrate to the suburbs of either the metros they currently live in, or to the suburbs of more affordable metro areas with favorable job growth. However, the impact of these lifestyle choices on U.S. cities will present varying investment opportunities, depending on each community’s job growth prospects, affordability and commercial property landscape.”
Key findings include:
– “Flight to Suburb Metros” – Older Millennials stay close to urban centers for short commutes and urban amenities as they establish households and prioritize family life in such cities as San Francisco, Los Angeles and New York. Potentially boosts suburban office properties and well-located lifestyle shopping centers with a market-dominant or specialty grocer.
– “Millennial Magnets” include such cities as Chicago, Salt Lake City, Phoenix, Austin, Orlando, Charleston and Raleigh. Younger Millennials prefer to work in the technology sector, and in livable, lower-cost communities compared to other big cities. Affordable tech hubs positioned to continue attracting people in their 20s, thus creating attractive investment opportunities for select multifamily properties, particularly in emerging and redeveloping urban neighborhoods, as well as in certain office nodes and shopping centers.
– “Tech Super Hubs” include such as Boston, Denver, Seattle, Portland and Washington, DC. While tech-related job growth will attract younger Millennials, the high cost of living will continue to provide a tailwind to city center multifamily properties, select office sub-markets and high street retail neighborhoods in the urban core of these hub cities.
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