The nation is at the apex of change as baby boomers prepare to hand control to millennials.
“You are in the front row seat of one of the greatest generational shifts of all time,” said Christopher Lee, president and chief executive officer of CEL & Associates Inc., a consulting firm for the real estate industry in Los Angeles, and author of “Transformational Leadership in the New Age of Real Estate.”
“A huge generational transfer is about to take place from aging baby boomers to soon-to-be in-charge millennials,” Lee said, and that will change the way U.S. companies conduct business, manage personnel and design office space.
Lee shed light on key characteristics of the millennials — those born between 1977 and 1996 — noting how this generation has over taken the boomers as the largest generation alive today. Boomers were born between 1946 and 1964.
Experts differ on the years that constitute millennials. Pew Research Center defines the generation as those born between 1981 and 1997.
“I will tell you what you need to know about millennials, what you should know about millennials and what will scare you about millennials,” Lee said.
Lee was the keynote speaker at the 7th Annual Commercial Real Estate Forum in Henrico County. About 320 people attended the Tuesday event at the Westin Richmond Hotel presented by Commonwealth Commercial, a commercial real estate company in Henrico, and its partner firm, Lingerfelt CommonWealth Partners.
Millennials are a population of 75.4 million. They are 20 to 39 years of age. By 2020, 46 percent of the U.S. workforce will be millennials.
The number of millennials is a half-million more than the 74.9 million living baby boomers, who were defined as anyone who was 51 to 69 years old in 2015, Pew said.
The interim bunch, Generation X, is projected to follow suit and surpass baby boomers by 2028, Pew also projected.
The millennial generation’s population is expected to peak in 2036 with 81.1 million living members, when the oldest millennial will be 56, Pew said. The baby boomer generation peaked in 1999 with 78.8 million members.
Ten percent of recent college graduates think Judge Judy is on the U.S. Supreme Court and 77 percent can not name a U.S. senator from their home state, Lee said. Forty-three percent of people under 30 rate socialism more favorably than capitalism. Only 20 percent vote.
This is the generation of the helicopter parents, who hired a plethora of tutors and coaches to help their children, Lee said. The cartoons they watched had moral lessons: say no to drugs, hug a tree.
“They were overly protected all the time,” Lee said. “They are socially and environmentally aware ... They were raised to excel. They are multi-taskers, but they have short attention spans.”
They grew up on Barney — America’s favorite purple dinosaur, Beanie Babies and technology. “As digital natives, everything is one click away,” Lee said.
Millennials have a strong sense of morality, he said. They want to work for companies that support charities or volunteer work in the community. They want to feel connected to the community.
“They believe they have been designated to supply a sense of community that their parents did not,” Lee said.
“They are forcing our hand relative to the office. They like teamwork and collaborative workspaces, not individual cubicles. They want a work-life balance and a flexible schedules ... They seek and need feedback.”
As the tech generation, “they feel it’s a right to work remotely,” Lee said. “They want meaningful hours, not just schedules.”
They don’t trust banks and they often value online training higher than degrees, he said.
Robert B. Valentine, 26, a research analyst at Lingerfelt CommonWealth Partners, said most of what Lee said resonated with him.
“The political comments were on target,” Valentine said. “People my age don’t consider it a good use of time to try to understand politics.”
Valentine said he is registered to vote, but he is not sure he will exercise the privilege this year.
Like most people his age, he likes the idea of companies that support communities and volunteer work. “I didn’t make a choice of employers based on giving back to the community, but it is a very good incentive to join that team.”
His use of the word “team” instead of company reflects the generational influence. “There’s something to be said for open communications and no closed doors,” Valentine said.
While keen about protecting the environment and energy efficiencies, Valentine said he recognizes that installing upgrades to make buildings more energy efficient is often cost prohibitive. “That’s extremely expensive to push on building owners,” he said.
Valentine, who grew up in Richmond, said he is the product of overly protective parents. “I certainly think my generation was coddled and that has rippling effects ... Some people can’t get out from under the shell. But there’s a level of optimism that comes from being coddled.”
Lee threw out some eye raising statistics that he predicts will occur over the next decade:
- Twenty to 30 percent of real estate firms in existence in 2015 will close by 2025.
- Online retail sales, which make up 7 percent of all sales now, will rise to 19 percent by 2025, making shopping centers obsolete or in need of dramatic transformation.
- The emergence of certified underwriters means that within a decade, half of all today’s real estate brokers will be gone.
- Homeownership will drop into the 50th percentile. It peaked a few years ago at 69 percent and is now at 63 percent.
Valentine said he agrees with the assessments.
“I don’t go to the store for anything,” said Valentine, adding that he orders everything online including toiletries — paper towels and soaps — as well as his morning protein drinks. “The only thing I buy outside is lunch and dinner.”
While he owns a home in Richmond, many of his peers are saddled with student debt, so they don’t have the money to buy a house, he said.
In real estate, the industry is seeing a huge inflow of digital data, which will disrupt the sales industry, he said. “There will still be relationship building where the broker puts person A in touch with person B, but a lot of the business will be automated.”
“The silent generation gets satisfaction for a job well done,” Lee said, referring to the generation born before the baby boomers. “Baby boomers want money, title and the corner office. Xers work so they can have money for free time. Millennials need public praise.”
When it comes to work-life balance, the silent generation wants time off to care for others, he said. Boomers want time off to spend with family, but work comes first. Generation X wants time off for themselves. And millennials want time off for friends and personal growth.
“Young people are key to our success going forward,” Lee said. “We are at the apex, at the beginning part of a generational shift that will change the way we do business, in how we address asset management, leadership and development.”