SOUTHFIELD, MI—As experienced real estate professionals can attest, one of the things that make the industry so fascinating is that real estate is, to a large extent, a direct reflection of society: broader social, cultural and professional trends are oftentimes the driving force behind emerging real estate trends. That is according to locally based Farbman Group CEO, Andy Farbman, who takes a closer look at emerging real estate industry trends—and their implications in the commentary below.

The views expressed in this column are the author's own.

The places and spaces where we live, work and play are intimately and inextricably linked to how we live, work and play. A closer look at some of the most influential real estate trends demonstrates this connection clearly. As new demographic groups become more influential, as professional preferences and lifestyle trends emerge and evolve, and as new technologies offer powerful and innovative new solutions with an increasingly mainstream degree of utility, clear real estate industry trends emerge that reflect those developments.

Catering to Millennials

An ongoing focus on improving and enhancing amenities for a Millennial audience will continue to be a priority for real estate professionals. Millennials already make up almost 40% of the workforce, and that eye-opening number is estimated to rise to a remarkable 75% throughout the next 10 years. Business leaders are faced with the challenge of meeting the wants and needs of this emerging workforce majority if they want to attract and retain millennial talent. As owners, operators, developers and other industry professionals are discovering, a big part of doing that is keeping up with Millennial workspace preferences: a modern, comfortable work environment with unique collaborative spaces, convenient locations near public transit or major highways/expressways, and an abundance of dining and entertainment resources nearby where employees can gather on breaks or after work hours. Amenities are especially important as well: facilities like gyms and fitness centers, parks and green space, and other social/recreational options.

Suburban office product

Suburban office product continues to perform well. Here in the Midwest, an increasingly competitive office market has sparked renewed interest in a wide range of different categories of office product. Quality suburban office space has become increasingly popular, especially in the last year or so. With so much attention being paid to Millennial workplace preferences and new urban office locations, real estate professionals would be wise to prioritize and highlight these elements and focus more marketing resources emphasizing the conveniences of suburban office product, such as abundant parking and typically lower rental rates.

"18-hour cities"

As the revitalization of so many urban environments continues across the country, the "nine-to-five" cities that turn into virtual ghost towns after work hours are falling by the wayside. Today, we see more and more "18-hour cities"—a mix of uses that includes residential, retail, dining, entertainment and walk-to-work offices—has helped to significantly expand the window of time when the built environment is activated and energized by human activity. With the exception of a small handful of iconic 24-hour cities, the majority of significant urban areas and downtowns in America are evolving towards an 18-hour model. This trend is a meaningful one for cities and real estate professionals alike, as the expanded hours of activity and synergistic blend of uses fuels a commercial engine that can facilitate additional investment and a cascade of positive impacts.

Rise in shared workspaces

In many parts of the country, the workplace has undergone a transformation. As a more relaxed, collaborative and flexible approach has gained additional traction, more modern work environments are embracing creative concepts such as co-working. In a co-working setup, employees share space and facilities despite working for different companies (or working independently). These workspaces are obviously ideal for freelancers, start-ups and other smaller organizations that are not yet ready or able to invest in premium space. There are a number of variations on the co-working theme, but the fundamentals are the same: shared spaces, shared resources, and greater professional flexibility in a group (and sometimes actively collaborative) setting.

New technologies and new efficiencies

Technology has become such a ubiquitous feature on the professional landscape that it can sometimes be easy to take it for granted; it blends into the background in many cases. From communication that is essentially instantaneous, to powerful programs that streamline internal and external processes, savvy companies everywhere—including ours—are taking advantage of new technologies to operate more efficiently and enhance productivity. Consequently, technology–and the infrastructure necessary to support that technology–is no longer a luxury, it is a necessity. More and more companies are not just relying on technology for small conveniences, but are leveraging it in ways that make a meaningful and sometimes dramatic difference to the operational framework of an organization and, ultimately, its bottom line. Digital storage and communication, information sharing across wide distances, and the use of specialized computer programs to streamline processes and make tasks more efficient all give employees the opportunity to be more engaged and more productive, while simultaneously impacting their needs for functional space.

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