Six Millennial Trends Changing the Face of Our Cities

March 1, 2017
Written by: Diane K. Danielson, CREW Boston

Photo credit: WeWork

In 2015, Millennials surpassed Generation Xers and their predecessors, the Baby Boomers, to become the largest generation in America’s workforce. Anytime we pass the generational baton, we experience change in our workplaces and in how we use commercial real estate. For instance, Baby Boomers grew companies under command-and-control leadership and remained loyal to those companies, which built suburban campuses and high-end offices in Class-A space with executive floors and corner offices. Then Generation X ushered in the Internet and casual Fridays, the latter of which seem almost quaint today. That was also the first generation to talk about flexibility, and many built home offices from which they started their own companies.

We now have Millennials once again changing the way we “office” and how we live and work in our cities. There are six major trends stemming from their influence:

1. The urban campus

General Electric in Boston, McDonald’s in Chicago, and Pinterest in San Francisco are just a few of the companies locating or relocating their headquarters into downtown areas. What’s driving this urban immigration? It’s not solely the tax breaks — it’s a war for talent. Millennials want to live and work in areas that are walkable and bikeable with recreational facilities and public transit. Another driver of the urban campus is the proximity to synergistic resources, like research universities and incubators. Unlike in past years, companies aren’t just seeking out space in Class-A office towers. Instead, many are building anew or renovating space to their liking, which means sustainable and green architecture, more spaces to congregate, room for pop-up lunch vendors, glass walls (or no walls), and high ceilings. Class-B brick-and-beam, open design is often more attractive than traditional floors with executive offices surrounding a sea of cubicles.

2. Urban storefronts

We are also seeing traditional suburban big-box retailers like Target and Staples following the Millennials by creating scaled-down urban storefronts. For instance, Target just announced that it plans to open a 43,000-square-foot location on 34th Street in Midtown Manhattan, across the street from Macy’s flagship department store. These stores have smaller footprints (suburban Targets, for instance, average about 135,000 square feet), same-day delivery, and curated content. Items are geared to the apartment dweller and come in smaller packaging options so it’s easier for shoppers to carry their purchases home and store them.

3. Co-working spaces

Even non–Fortune 500 companies are chasing the Millennials into the urban core. The most cost-effective way to do so is in co-working spaces. WeWork is the leader in this area, with 159 locations around the globe. Due to demand, its model has moved beyond serving small businesses and individuals to working with larger companies like the aforementioned General Electric and Pinterest.

Finding the right buildings for co-working spaces involves more than a location proximate to retail and public transit. Buildings must be retrofitted to accommodate more people per square foot. Co-working spaces have also downsized the ratio of square feet per person from 175 to approximately 70. This also means accounting for HVAC issues, air quality, noise (high ceilings are a must), and modernized elevator systems.

4. Co-living spaces

WeWork is also changing the face of city living with their WeLive locations. Whether you consider them micro-apartments or dorms for grownups, they provide an alternative to a traditional lease with roommates. Their flexibility and community feel have made them popular with more than just Millennials. However, they are unlikely to solve the issues of affordable workforce housing many are still facing in high-priced urban areas.

5. Urban manufacturing

Millennials are also influencing small and urban manufacturing. Thanks to innovations in 3-D printing, lean manufacturing techniques, and online marketplaces like Etsy, we are seeing a rise of “makers” or smaller manufacturers in the U.S. Many of these new companies are run by Millennials and are locating downtown and near research universities. General Electric is specifically designing its Boston headquarters to accommodate local creators and makers in an incubator-type setting.

GE Headquarters Photo credit: Gensler/GE

Photo credit: Gensler/GE

6. Smart infrastructure

As Millennials flock to cities — and companies follow — this spotlights the need to both reinvest in and reinvent our infrastructure. For instance, as more people move into microapartments and cram into co-working spaces, public transportation systems — some designed over a century ago — are becoming strained. Other challenges we face include increased urban heat and rising seas due to climate change. Now cities around the globe are experimenting with smart technology, self-driving cars, and green infrastructure that can cool cities and control flooding.

These infrastructure challenges require long-term solutions, and the commercial real estate industry plays an important role in ensuring that our cities are sustainable and livable even after all the Millennials retire.

Diana DanielsonDiane K. Danielson is the chief operating officer of SVN International Corp., a commercial real estate franchisor headquartered in Boston with over 200 offices in the US and internationally. Danielson, a 2015 Real Estate Forum Woman to Watch, was recently appointed to the CREW Boston Legacy Council. 

This article previously appeared in The VIEW, the quarterly newsletter of  CREW San Francisco.