Working Across Generations Key to Development

FARMINGTON, MO—Commercial development not only enhances communities, but also fuels economies by creating jobs that result in increased consumer spending. According to multiple sources, it is estimated that commercial development bolsters the economy by providing 100,000 new jobs every month. NAIOP, the commercial development real estate association, asserts that commercial development made up 16% of the GDP in 2014. That's why, today, investors are increasingly confident about acquiring commercial properties; business is booming.

Simultaneously, however, the industry is experiencing some growing pains as commercial developers belonging to the Baby Boomer generation frequently find themselves interacting with Millennials on commercial deals. A clash of cultures is apparent as Millennials become a noticeable force in commercial real estate.

Why Should You Care About Cooperation Between Baby Boomers and Millennials?

Put simply, because it affects the rate at which communities can grow, jobs can be created, and economies can be restored or enhanced. We've all heard the phrase “time kills all deals.” The longer it takes to close a deal, the more likely a deal will never close. Nowhere is this truer than in the world of commercial development. If all players aren't on the same page of the playbook in a commercial development deal, it can cause a deal to stop before it starts or significantly elongate the process.

What's the Rift Between these Generations?

Go to your favorite news site and you'll be sure to find multiple articles exploring the differences between Boomers and Millennials. Business leaders, corporate culture experts and others are eager to magnify the distinctions between these two populations: Baby Boomers are more cautious with budgets, Millennials are more technologically advanced, Boomers tend toward micromanagement, Millennials tend toward flexibility, and other stereotypes that further drive a wedge between professionals in these age groups. Ironically, in commercial development, these two distinct groups have more in common than not: members of these two groups are used to getting deals done quickly, but in very different ways.

In the 1950s, the commercial development industry was experiencing a resurgence similar to the one we are experiencing today. The GNP before the war in 1940 was just over $100 billion. By 1955, it had tripled to $310 billion due to this real estate boom fueled by pent-up demand and a surging economy.

During the 1950s and 1960s, commercial development deals were completed with a handshake and a martini. Once the dotted lines were signed, development began and communities benefited. In 2015, when Millennials drive a commercial development deal, texts and emails are exchanged until the contract is signed (usually electronically). Development begins and communities benefit. The commercial development process has changed; the end result, however, when deal drivers are of the same era, is still relatively fast and effective. Problems arise when the individuals necessary to deal negotiation and completion belong to different generations.

How Can These Two Groups Better Work Together?

Increased collaboration between Baby Boomers and Millennials on commercial development deals is essential for a streamlined process. Here are the top five tips our team has found helpful when dealing with a diversified partner and stakeholder list:

• Communicate Preferences: At the start, convey your preferred method of communication. According to the Princeton Review, the awareness of preferred work styles is key to bridging generation gaps. Be clear about whether you are more likely to respond via phone, text, email, or face-to-face meeting. When communications preferences are known, less time is wasted waiting on responses.

• Awareness and Appreciation: Take the time to understand why each team member is involved in the development deal. This will make you acutely aware of each individual's value, decrease frustration, and foster an environment of respect.

• Be Humble: Do not let ego and righteousness get in the way of progress. Respect each individual's contributions.

• Build a Relationship: Invest the time to build a relationship with those involved in the deal away from the negotiation table and the project. When you begin to foster a more personal relationship with an individual (as opposed to building a relationship with the tasks for which the individual is responsible), you gain a broader perspective about their approach.

• Know When To Walk Away: Sometimes a deal goes south. It could have nothing to do with the personalities (or ages) of those involved, or it could have everything to do with those variables. A smart commercial development professional knows when to walk away in order to save time, money, and frustration.

Final Thoughts

Commercial development deals can take almost 50% longer when the parties involved approach the project in conflicting ways. When these deals are prolonged, communities and their inhabitants suffer. When it takes longer to build that retail strip or community center, people are out of work and without those local economy-generating resources for more time.

Baby Boomers involved in commercial development are delaying retirement either for the love of the industry or because they suffered a hit in 2008; Millennials are increasingly entering the field. As this changing of the guard begins to slowly take place throughout the next decade, commercial development deal efficacy will depend on the ability of these two groups to better adapt, communicate, and collaborate. The health of our communities—and our economy—depends on it.

As CEO of Missouri Land Co., Matt Burgess has been developing commercial and residential real estate for more than two decades. He may be contacted at matt@molandcompany.com. The views expressed here are the author's own.