David Gilbert, President and CIO at Clarion Partners LLC, Looks at Millennials
Millennials. They’re on every businesspersons’ mind, not least of which are real estate developers. David talks about where this socio-economic group is now and where they might want to raise a family. Could an exodus to the suburbs—driven by Millennials’ search for good school systems—be on the horizon? Will there be enough of a supply to meet this demand? David explores the real estate sea change that might take place over the next decade.
The topic today is pretty broad but we’re starting New York-centric: the impact of TAMI demand and technology in the office markets and where that is evolving and what factors would influence it in the future.
The topic today is pretty broad but we’re starting New York-centric: the impact of TAMI demand and technology in the office markets and where that is evolving and what factors would influence it in the future. Also, demographics in New York and what neighborhoods are likely over the intermediate term or longer term to benefit from some of these trends, the Millennials. On every panel I’ve talked to in the last five years it’s, in part, about Millennials as that’s where a lot of demand is coming from. Where are they going? Where do they want to live, work and play? We’ll go beyond New York and talk about the same dynamics across the country– what submarkets are interesting? What markets are expanding? That’s a lot of what I spend my time doing because all of these things inform where we want to get ahead of demand and buy or create assets.
Key takeaways – there’s some risk, there’s some interesting points of inflection over the next five years. Technology is clearly one of them and there’s uncertainty around that, the impact of driverless cars and so forth. The second is the evolution of where Millennials want to live and their link to schools. So there’s a point where Millennials are going to have children; although delayed, it’s coming. What everyone wants is high quality schools for their children. While we’ve seen massive evolution in where people can assess really high quality, cool office space, there’s been little evolution in where you can get good schools. Schooling has lagged and the options for access to schools will prompt potentially a move back to the suburbs, which affects every form of demand – retail, office and housing.
And these are the things that we are tracking and forecasting. We don’t have any finite answers, but it’s is probably one of the most seminal points of distinction in growth over the next five to 10 years that we’re tracking.
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