Commercial Real Estate Market Trends Illustrate Needs of Boomer Generation

boomer-impact-on-commercial-real-estate-market-trendsAt first glance, many investors, property owners and even some active real estate agents might not notice the influence that our nation's aging population has brought to bear on commercial real estate market trends. Residential agents are already well aware of how aging affects the selection and sale of single family residential properties, but this trend has now become a major influence in the world of commercial real estate, as well, particularly in certain areas of the nation. In fact, the astute agent can now see this emerging pattern as one that will affect the real estate industry far into the future, and will offer many the opportunity to specialize in this segment of the market.

The Boomer Effect on Two Major Commercial Real Estate Market Trends

The segment of our population known as the Baby Boomer generation deserves consideration from the real estate industry, as well as others, in part due to their sheer numbers. According to recent statistics, there are in excess of 77 million people born into the post World War II period that has been classified as the Baby Boomer generation. To put this in perspective, this figure means that approximately one-quarter of our entire population is counted as a Baby Boomer. 

As any human ages, their basic needs will also change. Decreases in mobility and physical capabilities are often a natural part of the aging process, resulting in changing needs for housing and other areas of daily life. Many of the more serious age-related illnesses often result in increased needs for medical, nursing and rehabilitative care options. Even changes in income and lifestyle, such as those experienced during retirement, or the loss of a spouse, can bring about changing requirements for housing. 

Increasing Demand for More Suitable Housing

As Baby Boomers reach retirement, one of the first changes they may make is often to downsize the family home. The value of the home represents a sizeable portion of total wealth for many American families today, and once the nest becomes empty, many Baby Boomers will seek to recoup this portion of their investments by downsizing. Commercial real estate market trends show that many of these older Americans are interested in some type of retirement community or multi-family complex where there are many residents in their age range.

The demand for this type of retirement living option has already influenced commercial real estate market trends and it will continue to do so in the future. Developers of these communities would be well advised to consider all the needs of their potential residents, including basic needs, social interests, security and lifestyle choices. Some of the options that should be considered when considering filling these residential needs are:

  • Gated communities, or those with secure entry areas
  • Secure, covered parking areas
  • Residential units where all or most maintenance, lawn care and snow removal are included in the package
  • Mobility-friendly structures, with features such as one-level designs, ramps, elevators, railings and non-skid surfaces 

Boomer Related Commercial Real Estate Market Trends Affect More than Just Housing

In addition to satisfying the increasing commercial real estate market trends for housing an aging population, there are many other needs to be filled by the commercial real estate industry. These include an increased demand for: 

  • Hospitals, laboratories, medical offices and out-patient care facilities 
  • Nursing facilities, both long and short term
  • Physical therapy facilities
  • Transportation and delivery businesses 
  • Recreational and entertainment opportunities that appeal to older Americans

Keeping an eye out for emerging commercial real estate market trends helps to keep this industry vibrant and growing. Of all possible professions, the commercial real estate agent is the one that is particularly situated to help their communities grow, adapt and prosper as they meet the needs of all segments of the population. Find out about how remote workers are also changing commercial real estate. 

 

2020 Hampton Roads Business Resource Guide 001

 

 

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