Millennials Leading the Way on Office

CHICAGO—Few topics attract more attention in the world of commercial real estate than the continuing impact of millennial workers on office design. And with the jobs market on the mend, young job-seekers will have more options in the coming years, making it even more important for companies to create office spaces that will attract top talent.

Jeff Lessard, senior managing director at Cushman & Wakefield, tackled how to do so last week in Chicago at the Society of Industrial and Office Realtors' Fall Meeting. He began by pointing out that the millennial generation, those born in 1982 and later, are already the largest group in the workforce.

Still, why so many feel they have to concern themselves with millennials and what they want or need came up several times at the conference. After all, the workforce is always in a state of flux due to retirements and young people taking their first jobs. But Lessard believes that this new crop of workers is fundamentally different from previous generations. (For the purposes of this discussion, Lessard was specifically examining only one segment of millennials, that of highly-educated workers in core, secondary and perhaps tertiary markets.)

For one thing, they are the first group that has never been without ubiquitous high-tech gadgets, he said, which transforms how they can function in a workplace, but also gives them far greater creativity in how they use social media and other communication tools. Furthermore, many came of age just when the economic storm hit, and this forced delay in starting their true careers also gave them time to reflect on what they really wanted, and perhaps more determination to make it happen. And these and other differences fundamentally impacts the landscapes of both industrial and office-related real estate.

Lessard then showed a slide of numerous corporate logos including ones from Motorola, UBS, Accenture, Quicken Loans, United Airlines and many others. He pointed out that all of these top companies had recently moved their headquarters from a suburban location and into an urban core. And the number one reason given for the moves was the chance to bolster talent recruitment by reinventing their corporate image, especially in the eyes of the growing millennial generation that prefers urban living.

“That's profound, and very exciting for the real estate professional,” Lessard said. It means that real estate is not just about leases, rental rates and what concessions you can secure from a landlord. It goes to the core of a corporation's identity and how it is perceived by potential workers and even customers.

And even though companies in land-constrained markets, such as San Francisco, may not have the opportunity to ditch suburban campuses in favor of urban locations, many are “taking their suburban campuses and urbanizing them,” Lessard said, with new, more collaborative spaces and giving a more neighborly feel to once sterile office parks. These changes “benefit all generations, but the millennials are leading.”