Realty Times October 9, 2002

Boomers, Kids, Minorities Drive Real Estate
by Broderick Perkins

More than ever, demographics are driving the types of homes and other dwellings developers are erecting.

Baby Boomers, Echo Boomers (Baby Boomers' kids) and ethnic minority populations are prompting developers to raise the roof on the kinds of housing and shopping centers the special populations want, according to a major media outlet.

"The commercial real estate community has always weighed the importance of demographics in any development undertaking, but it is clear that the industry has only begun to realize the opportunities reflected in the 2000 Census numbers," said Matt Valley, editor-in-chief of PRIMEDIA's National Real Estate Investor, a commercial real estate trend publication.

PRIMEDIA, a traditional and new media conglomerate, publishes other special interest magazines including American Demographics, Seventeen, American Baby and New York among some 250 others.

The Investor's "How Demographics Shape Development" by Amanda May highlights several examples illustrating the building trend.

  • At 73.8 million people, Baby Boomers make up the largest segment of the population. Predominantly large home owners, many are leaving suburbia for the close-knit lifestyles of inner cities. This segment has shown a preference for luxury, care-free apartment and condo living, prompting real estate developers to construct spacious medium and high density housing units loaded with amenities including concierges and underground parking.

    May writes, while Baby Boomers tend to stay in their homes as they age rather than move to multifamily properties, a small percentage of people who do sell their large primary residences will have a great impact on multifamily housing because of the generation's sheer size.

  • At 72.7 million people, the Echo Boomer crowd is nearly as large as their predecessors, but are younger and more ethnically diverse. Echo Boomers live for action and favor cutting-edge designs. To meet their needs, more activity-oriented apartment complexes, open floor plans, and cool loft-style condos and townhomes are being developed with swimming pools, clubhouses, Jacuzzis and outdoor fireplaces.

    May's story says many Echo Boomers, aged 6 to 23, will soon be first time renters and represent huge demand to the specialty mixed-use multifamily housing industry which often includes hip ground floor retailers in building design.

  • Hispanics comprise 12.5 percent of the population and African Americans make up 12.1 percent. As the influence of these two groups continues to have a greater impact on American society, developers are looking to build more ethnically oriented projects, particularly near international gateways along the U.S.-Mexico border and within inner cities. In each case, the powerful influence of their demographic presence is noted in the architectural design of retail stores, shopping centers and the construction of new infrastructure and cultural centers.

    May reports expect to see greater focus on Hispanic needs as that population swells to a nearly 20 percent share of the nation's population by 2030.

    "Going forward, I think you're going to see more development, particularly retail and multifamily housing, catering to these three demographic groups. Keep in mind historically, that commercial real estate products are a response to broader demographic trends. As changes occur in the makeup of the population, commercial real estate will respond accordingly," Valley said.


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