The way that the next generation wants to live may be changing, how suburbs and commercial business districts are viewed. California millenials want their neighborhoods to provide them with everything they need — often within walking distance. Does this mean that developers will need to adjust how and where they build in order to accommodate a new way of thinking and living?
Having homes in one community, businesses in another area and shopping in yet another area, does not seem to appeal to the newest generation of workers, homeowners and shoppers. It appears that here in California, millenials want to be able to shop, entertain, work and live all within an area that allows them to either use public transportation or walk. The cities filled up quickly with renters, and now individuals and companies are looking to traditionally suburban areas to find good rental space that provides the same benefits of being in an urban setting.
Many investors see the trend and are following commercial renters out of urban areas that seem to be filled to capacity. This means that developers may need to rethink the sites they choose for their projects. Even though economic recovery may have been faster in cities like San Francisco and Los Angeles, other major urban areas such as Oakland are not moving quite as fast. However, that does not mean that they will not.
Looking to the future is often part of the strategy employed by developers in choosing project sites. As millenials spend more dollars in the rental market, part of that strategy may need to include creating urban-like settings outside the state’s major cities. This could mean dealing with additional land use and zoning issues, along with other potential roadblocks to providing potential tenants with what they want. It may be advantageous to seek advice and assistance to get through the legal and business issues that could arise.
Source: northbaybusinessjournal.com, “Commercial property investors follow tenants to the suburbs“, Jeff Quakenbush, March 20, 2018