How Millennials Are Changing Commercial Real Estate: Office Vacancies (Pt. 2)
The millennial attitude toward work is very different than it was for Generation X or the Baby Boomers. While being extremely savvy with technology (we are the “Facebook” generation after all), millennials work to live, not live to work. Slaving away to prove our worth and escalate up the corporate ladder at a Fortune 500 company for 40-50 years until we finally retire is not the goal of our generation (no offense, parents and grandparents!). Instead we are a generation of efficiency, technology, creativity, and experiences. While we understand the necessity of working to make money and provide a sense of accomplishment, we value our personal lives substantially more than the generations before us and the feeling of obligation to make an appearance at the office just to give a boss some “face time” has diminished over the last few years due to three very disparate reasons: 1) significant advancements in technology, 2) more “millennipreneurs” and telecommuters than ever, and 3) seeing how much our parents and grandparents missed out on in their lives. The combination of these three factors along with the worldview it has cultivated in the millennial generation will have an interesting effect on commercial real estate in the coming years – by increasing telecommuting and the freelance workforce, it is bound to also increase office vacancies in the cities millennials are most concentrated in.
Technology Leads to Telecommuting
With smart phones, tablets, and laptops being both tools of efficiency and leashes to our jobs, we now spend more time communicating via phone and internet than we do in person. Therefore it was only a natural progression for telecommuting to become a viable working option for many people in different areas of business. Now that we can upload, download, email, update, and do any other work we could possibly need to accomplish through secure servers in the cloud, the necessity to work in the office has dissipated for many. The efficiency that technology now affords us allows us to accomplish most (if not all) of our necessary work outside of the normal office environment while avoiding some of the normal morning rituals, long commutes back and forth to the office, and gives us more time to spend with friends and family.
Combined with the advancement of technology, the millennial “free spirit” described above and the creativity forged during the great recession has lead to more freelancers than ever before. This unique set of tools and imagination has given us the ability to create independent business ventures or engage in freelance consulting or assignments from anywhere in the world rather than working the typical 9-5 office job. There’s a reason why blogs and YouTube are so popular among the millennial generation.
Millennials have reached the age now where not only are we starting new businesses, we’re actually more successful at it than our parents’ generation. And because of our familiarity with technology and the importance of a life outside of work, more of the companies’ workforces (whether employees or independent contractors) are permitted to work remotely with flexible hours, project-based assignments, and greater autonomy.
Although the office sector seems to be absorbing demand for now, we can expect that the combination of more office construction along with the continued trend of increasing flexwork arrangements will eventually lead to less demand for office space and higher vacancies.