Multifamily N Illinois

Wellness goes over well with millennials in multifamily properties

Wellness goes over well with millennials in multifamily properties,ph1

Millennials are expected in 2019 to outnumber baby boomers for the first time in U.S. history, enabling them to further strengthen their grip on the American economy. Albeit with a twist.

While there are 80 million millennials in the workforce, and while they are expected to be able to exert some $1.4 trillion in buying power by 2020, their spending habits are surprisingly conservative. They are, according to Forbes, reminiscent of the so-called Silent Generation, which emerged after the Great Depression.

This is hardly coincidental, as millennials, defined as those born between 1981 and 1997, felt the effects of the Great Recession from 2007 to 2009, and before that the housing bubble. Theirs is also a generation that has been saddled with crushing student debt, leaving them in a position where they are far more likely to rent an apartment than buy a home. Fully two-thirds of them do the former, and all told more Americans were renting in 2017 than in any year since 1965.

Millennials do have expectations for those multifamily properties, though—expectations that differ from those of the boomers. For example, one study showed that 65 percent of the older generation see parking as a priority for such properties, while 36 percent of the millennials view it as such (a number that is perhaps reflective of the increased prevalence of ride-sharing). On the other hand, 69 percent of the younger cohort believe that common areas are crucial, while 37 percent of baby boomers agree.

Nowhere is the contrast between generations more stark than in the desire for wellness. 71 percent of millennials see a pool as a big deal in multifamily properties, while 31 percent of the boomers surveyed see things that way, and 69 percent of millennials put a high priority on a fitness center, while 29 percent of the older demographic do.

This is not to say that millennials don’t have other wants and needs when it comes to multifamily dwellings—wants and needs they are only too happy to express. For starters (and stop me if you’ve heard this one before), it’s all about location, location, location—proximity not only to their workplaces but public transportation, retail outlets, restaurants, entertainment and each other. That is the oldest tenet in real estate, and it still holds true.

Millennials also need a place that will offer pet services—especially for dogs, since 75 percent of them own canines (as compared to the 51 percent who own cats). They want dog parks, doggy daycare, dog-walking services and pet spas.

Beyond that, they are seeking Wi-Fi in those communal areas. They are also seeking secure package delivery—a relatively new concern, now that we find ourselves in the Age of Amazon—since over 16 million packages are delivered each day in the U.S.

But wellness is a biggie. It is reflected in the desire for juice bars, and to some degree in the desire for bicycle facilities—storage, parking, repair, etc.—though the latter is also reflective of cities’ increasing bike-friendliness and, once again, location, location, location; if millennials’ workplaces are within, say, 10 miles of their apartments, bikes are a viable mode of transportation, in addition to a means of getting a workout.

The fitness center remains the key element to any wellness-oriented multifamily property. There are those who have some very specific ideas about what such a facility should include, beyond up-to-date equipment and 24-hour access. One report went so far as to say the lighting should be muted, so that the users look incredibly buff rather than incredibly sweaty; that the place should be festooned in bright colors, since such hues motivate folks; that it wouldn’t be the worst idea to have it overlooking the pool, since that further galvanizes workout warriors to tone their physiques and that it is essential to have a multipurpose area for activities like yoga, spin, kickboxing, CrossFit and Zumba.

Another report listed other important features. Networked equipment results in group classes that can be integrated, and greater motivation (not to mention a greater social connection) among the participants while a wellness director can provide upkeep and security and oversee class schedules and the like. On-site personal training can teach proper technique and provide motivation, as do contests such as a leaderboard showing who has pedaled the furthest, done the most pull-ups, etc.

The bottom line, then, is that wellness matters more than ever, and that facilities promoting it are vital to multifamily properties.

Michael H. Zaransky is the founder and managing principal of MZ Capital Partners. He has a wide range of real estate, banking and financial experience and has been a licensed Illinois real estate broker since 1979. Zaransky is a member of the Young Presidents’ Organization (YPO-Gold), the National Apartment Association, the National Multifamily Housing Council (for which he is a board member) and the Urban Land Institute.