Millennials Outduel Baby Boomers
“When researching products, millennials are more than three times as likely to turn to social media and mobile apps (both 48 percent) than their baby boomer counterparts (both 14 percent).”
- Source: Salesforce Connected Shoppers Report
Hospitality - Due to positive forecasts for continued U.S. economic expansion during 2018, the hotel industry appears primed for increased demand nationally. Supply growth, however, is slowing down from its peak in 2017, according to CBRE Research. The primary hotel guest profile is changing from from business to leisure. Over the medium term, hotels that cater to those traveling for vacations compared to those traveling for business will flourish.
Industrial - Blockchain can help manufacturers, distributors, and suppliers work together more efficiently by tracking supply chains in real time. In turn, this reduces costs by minimizing discrepancies and increases transparency, according to JLL. For example, Walmart is using blockchain to keep track of pork distribution in China and shipping produce from Latin America to the U.S. As one-day delivery becomes the new normal, e-commerce and retail companies can benefit as the technology makes tracking products easier.
Multifamily - The 2017 tax act could affect housing preferences, according to Marcus & Millichap. By increasing the standard deduction and restricting housing-related deductions, individuals have less incentive to purchase homes and more motivation to stay longer in apartments. Also, home builders may reduce construction while shifting a portion of the housing demand from home ownership to rentals. If this behavior change happens as more young adults move into their own apartments, the demand for multifamily could significantly outpace the supply.
Office - As employment has accelerated, the demand for office space has increased. As the labor markets tighten, however, the need for office space is tapering off, according to Cushman & Wakefield. The demand for office space peaked at 81 million square feet in 2015, slowed to 53.2 msf in 2016, and declined to 49.1 msf in 2017. Some of the decline comes from fewer square feet per person and slower job growth. C&W expects 1.1 million new office-using jobs to be created during the next three years, which is 50 percent lower than the 2.1 million-job pace from 2015 to 2017.
Retail - The three R's of retail transformation encompass reduce, reuse, and recycle, according to Think US cities 2018 outlook. Under reduce, retail tenants are ditching excess square footage for more efficient spaces. Other retailers are paring down their number of stores. The reuse is finding different tenants for shopping centers, such as grocers, gyms, and medical offices. Recycle is reimagining a former retail space as a mixed-use project of multifamily, office, healthcare, self-storage, and industrial.