Keep an eye on the Millennial Boom
After an incredible multi-billion dollar year for U.S. commercial real estate, the run is far from over for smart investors. In 2015, we’ll see much of the same momentum, especially in the multi-family and office space markets. Analysts believe multi-family will remain strong over the next two to three years, as investors rush to invest. Not only could we see a shortage of housing units, but considerable demand from baby boomers and Millennials could send prices higher, too.
Just as the Boomers control $1 trillion of disposable income, this new generation of Millennials account for $1.3 trillion of consumer spending, or 21% of all spending. To the smart investor, that means sit up and take notice to whatever that generation is spending money on, including schooling, retailers, cell phones, new technology and real estate.
Not only is this generation driving the growth of multi-family housing, they want more creative office space where they can have the “open communication and brainstorm-inspiring environment,” they’re attracted to, according to GlobeSt.
The rebounding office space market is worth watching, too, as vacancies fall and rents rise.
“The amount of office space absorbed for the year was nearly double the level of new office space added to the market,” CoStar notes, as reported by Realtor Mag. “Analysts expect that over the next two years annual absorption to continue in the 90-million square foot range.”
“The strong demand suggests that occupiers have gradually slowed the trend of shrinking square foot-per-employee office footprints, and the shadow supply of empty office space left over from the Great Recession is diminishing as growth moves forward at a very strong clip.”
The opportunities are endless. There’s no shortage of opportunity.