ATLANTA, GA - People in their 20s, Generation Y, are changing residential real estate in Atlanta. Gen Y is "our largest current clientele. It's our largest future clientele," said Patrick O'Donnell, a partner in the Lane Co., a multifamily developer. Born from 1979 to 1996, the 80 million people in Gen Y represent more than 26 percent of the U.S. population and $1.6 trillion in earning power, according to the research firm Robert Charles Lesser Co. By 2015, Gen Y will be more than a third of U.S residents, said James Johnson, professor at the University of North Carolina's Kenan-Flagler Business School.
Their expectations are forcing developers to rethink how projects are designed, built and sold. In Atlanta, interest in Gen Y is particularly keen because only New York and Los Angeles rate higher as places to live, Robert Charles Lesser says. And while most Gen Y folks living on their own today are renters, in four years they'll be a home-buying force, the company says. O'Donnell and others spoke at a recent forum called "The Impacts of Gen Y on Real Estate Development," sponsored by the Urban Land Institute Atlanta.
Bottom line: Many in Gen Y have little interest in the lawn mowing, cul de sac life that's characteristic of so much of Atlanta. At least for now. Instead, Gen Y wants high-tech convenience and communication, walkability, green building standards and diversity. They'll sacrifice space, and some will even pay more, to incorporate those qualities into their lives, real estate experts say. That's good news for infill redevelopment efforts. "Intown areas and inner suburbs will really remain on an upward trajectory" when the housing market turns around, said Sarah Kirsch, senior principal at Robert Charles Lesser.
Charlie Bible, 22, bought a condominium at the top of Viewpoint, a new highrise in Midtown, because of its central location, views and the sleek steel-and-glass look. And because "I love high-tech gadgets," he said. Bible watches ESPN and the news on small LCD screens that are part of the fitness equipment at Viewpoint. Novare Group, the developer, also installed a virtual art gallery and an online system where residents will be able to place restaurant orders or program their thermostats from remote locations.
Upgrades at Viewpoint include built-in iPod docking stations. Gen Y already is about 40 percent of the customer base for Novare, the biggest condo developer in Atlanta. "This is a generation that has always known a computer," said Uri Vaknin, vice president of business development at the Marketing Directors, a condo sales company. "They want these programmed lives."
Oakland Park, a condo building in Grant Park, boasts that it's LEED certified, meaning it has met national Leadership in Energy and Environmental Design standards. That includes floors of bamboo, a fast growing renewable resource, and dual-flush toilets that conserve water. LEED certification is on its way to becoming as ubiquitous as mixed-use development. "Green design is a trend the way indoor plumbing was a trend," Vaknin said.
Laura Barton, a 25-year-old social worker, said she bought a two-bedroom unit at Oakland Park because of its green advantages. "Eventually, we're all moving in that direction," she said. "I wanted to be ahead of the game." O'Donnell said Gen Y is challenging developers to rethink parking to make room for bike racks, greater storage and shared transportation. "When do we get to do a bank of Zipcars and lose 100 spaces?" he asked at the ULI forum.
Gen Y's favorite neighborhood amenity is a library, followed by restaurant or cafe, a main street village, a recycling center and a fitness center, the Robert Charles Lesser study says. Maybe that's not too surprising given that they've grown up in the information age.
Mass marketing is a turn-off to 20-somethings, so developments are selling themselves differently, using Web sites where youth interact. Renaissance Walk, a 161-unit condo development near Georgia State University, has a Facebook page. The new mixed-use project describes itself as being in "an open relationship" and looking for "friendship, networking."
Angela Harris, a 29-year-old who owns a dance presentation company, said she was Renaissance Walk's first buyer. Downtown's busy pace, artsy bent and investment potential attracted her. Her previous homes, apartments in Vinings and Smyrna, "didn't have the same energy I did," Harris said. In Buckhead, Brian Espie, a 24-year-old risk analyst for a reinsurance company, purchased a two-bedroom condo at The Park at East Paces, 20 miles from his job in Duluth. "I would never commute to the city," Espie said, nursing a draft beer on the patio at Twist, a bar and restaurant at Phipps Plaza, within walking distance of his home.
But what happens as Gen Y ages? Will most follow in the footsteps of the previous generation and exit for the suburbs? The Robert Charles Lesser study states that "70 percent do not believe they have to move to the suburbs once they have kids." And "only half are confident they will need a single-family home once they have kids."
Richard Martin, real estate professor at the University of Georgia's Terry College of Business, wonders if Gen Y will end up being that much different than the generation before. "Things always change when they get married and have kids," Martin said. "Tastes seem to converge with their parents." Espie said there's no way to predict where he'll be in 10 years, but "I don't think that my place is a trend. It's the centerpiece of Buckhead."
Source: AJC.com