Luring the Echo Techies
SAN FRANCISCO—Wouldn't it be convenient if someone had clear, intelligent answers to most of your CRE-related questions? Problem solved. Nina J. Gruen, a.k.a. Ms. Real Estate, a.k.a. the principal sociologist overseeing market research and analysis at Gruen Gruen + Associates, is here to answer readers' questions.
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Dear Ms. Real Estate:
I am in the process of planning the development of a multifamily rental for the technology-focused Echo Boomers—that is, those young professionals employed in the tech industry. What type of housing product should I build, and are there specific amenities I should be planning?
—Luring the Echo Techies
Dear Luring the Echo Techies,
Irrespective of living costs in the major tech centers, whether high-priced San Francisco or more modest-cost Austin, the Echo Techies’ salaries typically are two to three times the salaries of their peers employed in most other industries. You are wise, therefore, to inquire as to the type of residential product they prefer. Assuming your site is located in proximity to where the job action is, I have the following recommendations.
If, for example, you are planning a 20-plus-story building, the bulk of your units should be a combination of studios and one-bedrooms. You may want to include some two-bedroom units on the top floors. These larger units will appeal to Echo Boomer with roommates or young children, as well as some of the techies who struck it rich from a recent IPO.
All of the above unit types should have relatively high-quality kitchen and bath fixtures. The design of the units should be loft-like to permit maximum flexibility of the use of the space. With the possible exception of the two-bedroom units, which may be rented by younger families, you do not need to provide the same amount of storage space that traditional multifamily rentals serving other demographics require. This is because a high proportion of the techie Echo Boomers are male and do not have significant possessions, with the exception of electronic gadgets.
Your building, however, will have to provide sufficient secure bike storage space. The urban Echo Boomers are far less interested in cars than the previous generations and often use bikes for getting to their jobs and non-work destinations. When they need a car, there are many options, such as ZipCar.
Your building must be pet friendly—primarily dog friendly. While most of the techie Echo Boomers are not eager to be parents of babies, they are eager to be parents of dogs. I strongly recommend that you devote some of your outdoor space to a dog walk and dog bathing facility. The dog walk encourages your techie tenants to socialize with each other and the dog bath will save you major plumbing bills from stopped-up drains.
A gym is a must, as well as a wired community room. Your management team will need to encourage social events, since many of these young techies expend so many hours at work, in the hope of achieving the IPO jackpot, they have limited time to socialize except with those they meet at work.
With respect to potential retail tenants, you will need to look at the nature of the proximate competition. One of the most preferred activities for this high-tech, high-income, younger demographic is clubbing. Many go clubbing at least once a week. Ice cream parlors and yogurt shops, while somewhat less exciting, are typically well-received retail tenants.
And last, but certainly the first consideration is that the most advanced and fastest Internet service is an absolute must.
If you follow Ms. Real Estate’s advice as to the unit type and amenity package, when your building is available for rental, she would appreciate feedback as to whether her advice paid off.