The Suburbs Are Changing – And Now’s the Time to Invest
We’re strong believers in the strength of the suburbs, a topic of a number of our blogs and articles. That’s why we were excited to see the new findings of a forthcoming report, Demographic Strategies for Real Estate, which was compiled by the Urban Land Institute to showcase how the suburbs are changing. The shifts in market conditions will have massive implications for planning, land use, and the retail real estate market – and will notably have a positive impact on the investment opportunity that secondary markets provide.
What’s driving this shift? As millennials begin to raise families they’re looking towards more affordable suburban markets. This explains why 35 percent of homes sold in the U.S last year were purchased by millennials. Considering that the median age of this generation is 25, and the average age of a first-time home buyer is 31, it’s safe to say there’s a sizable wave of millennial homebuyers on the horizon. To accommodate this influx of new and younger homeowners, we can expect an increased demand for necessity-based retail, particularly retail that’s accessible and experiential, which both millennials and Baby Boomers alike are now accustomed to.
What are the other impacts this suburban migration is having on retail real estate? There’s likely to be more densification of the suburbs- essentially, suburban development that incorporates the best of city living into suburban residential patterns. This means that increasingly, retail properties will become more personal and flexible, with walkable shopping centers that cater to the community’s daily needs.
Our biggest takeaway from this report is that suburban brick-and-mortar, necessity-based retail isn’t going anywhere. As we consider the future of investment in secondary markets, it’s clear that the suburbs have never been stronger.