Millennial desires drive development trends

As millennials have grown to become the biggest part of the U.S. workforce, developers have been analyzing millennialsu2019 habits and preferences.

As millennials have grown to become the biggest part of the U.S. workforce, developers have been analyzing millennialsu2019 habits and preferences.

Houston has been named one of the fastest-growing cities in the U.S. in terms of its increasing population of millennials, and the trend is extending outside Loop 610 to suburban areas, such as Spring and Klein.

According to research from data and media company Bloomberg LP, Houston ranks eighth among cities that have seen the most millennials—those born between 1982 and 1996—move in from 2010-13. It is fifth among U.S. cities with the highest proportion of millennials, at about 22.1 percent of the city’s population.

Spring and Klein have followed a similar trend. As a result, developers in Spring and Klein have been exploring ways to continue to attract the millennial generation of workers and consumers.

Millennial desires drive development trends“It’s not necessarily that millennials are all moving to the typical urban environments,” said Steve Murdock, a demographer and professor of sociology at Rice University. “They are moving where the jobs and growth are. In north Houston, you have the launch of ExxonMobil’s [corporate campus], which is creating jobs in the oil and gas industry as well as ancillary industries.”

The percentage of individuals between 20 and 34 years old in Spring and Klein grew by 8.8
percent between 2011-14, which is an increase of 6,000 people.

Businesses and apartment complexes in the area have been working to attract and retain millennials during the past few years, said Myeshi Briley, president of the Spring Klein Chamber of Commerce.

“I’ve seen clinics and classes hosted and held about how to attract more millennials, how to make them happy [and asking] what are they looking for,” Briley said. “I’ve even seen a lot of surveys go out lately trying to get opinions from those young professionals on what makes them happy. What are they looking for to live in an area?”

Millennial desires drive development trendsMixed-use centers

The millennial influx has affected a number of development areas, including multifamily development and the construction of more mixed-use, walkable shopping centers that combine office space with retail and restaurants, according to a 2015 report produced by local commercial real estate company Avison Young.

These mixed-use developments, such as Springwoods Village and The Vintage, are typically located near multiple apartment complexes and often include some form of residential living as a part of their design.

Mixed-use centers are slowly replacing the suburban mall model in Houston, the report said.

“The retail market will continue to be driven by trends that support the environment that is favored by millennials,” the report concluded.

Master-planned community Springwoods Village, which is anchored by ExxonMobil’s $1 billion corporate campus, had millennials in mind during the development stage, said Keith Simon, executive director for Springwoods Village developer Coventry Development Corp.

The development’s mixed-use, walkable town center, CityPlace, is expected to feature 4 million square feet of office space and 400,000 square feet of retail, including a movie theater complex. Coventry expects to break ground on the first office buildings late in 2016 and complete construction on The Mark, the first hotel within CityPlace, in 2017, Simon said.

“We are very mindful of the desires of millennials, as they represent our future,” Simon said. “Their desire to be less dependent on a car fits in perfectly with Springwoods Village, where one can live close enough to walk to work or bike to the office, or, if driving to work in Springwoods Village, they can walk to restaurants and shopping at lunchtime or after work.”

The Vintage’s combination of retail, health care, restaurants, bars and apartment complexes creates a walkable, town-center feel that has attracted many millennials, said Ben White, vice president of leasing at Dunhill Partners, the company that manages leasing at the Vintage Park shopping center.

“The concept for Vintage Park was unlike anything that was in the area at the time,” White said. “We weren’t necessarily targeting millennials when we looked for tenants to sign, but we’ve found that we have tapped into a market of people who want this kind of development.”

Millennial desires drive development trendsInfluencing multifamily development

Many millennials are opting to rent instead of buying homes as they save money and pay down student debt, Murdock said. Millennials are occupying apartment complexes and rental homes longer than previous generations.

However, a survey from New York-based investment firm Goldman Sachs suggests renting is a short-term situation for the majority of millennials. Roughly 93 percent of renters ages 18-34 plan to buy a home someday, the survey found.

“[Millennials] often don’t have huge amounts of money saved up that you’d need to buy a condo or a home in River Oaks or even more modest areas,” Murdock said. “They haven’t built up the capital. In general, you’ll find less-expensive housing in suburban areas. The same boom that brought [millennials] here is the boom that caused prices to go up on homes in the central part of the [Houston] metro area.”

A conservative estimate from Population and Survey Analysts—a Texas-based demographic research firm that works closely with Klein ISD—suggests about 1,700 more apartments will be occupied within the district’s boundaries in the next year.

More than 11,000 occupied units are expected to be added during the next decade within KISD’s boundaries, the PASA demographic study states. In addition, more than 40 percent of housing projects constructed between 2014 and 2024 are projected to be multifamily developments, according to PASA data.

Millennial desires drive development trends“Many young professionals are not looking to buy a home at this time in their lives but still want to be able to live in a place that meets their wants and needs,” said Jen Merrihew, marketing manager  at  Allen Harrison Co.

Allen Harrison manages several multifamily properties in the Spring area, including The Preserve at Cypress Creek on Cypress Station Road and Applewood Village on Ella Boulevard. Merrihew said the group also manages 91Fifty, an apartment complex that opened in Cypress last fall and was designed with millennials in mind, offering modern aesthetics and organized social gatherings.

Although rental rates rival the price of a home mortgage, apartments in Spring and Klein are attracting young adults with greater amenities and  are allowing for more flexibility, Briley said.

“A lot of these apartments offer dog parks—the amenities are amazing at a lot of the complexes,” Briley said. “It offers, sometimes, what they would look for in a home, but they don’t have to do the maintenance.”



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