Commerical Property News
Jan 20, 2009
By: Terry Munoz, Vice President and Industry Practice Leader for Nielsen Claritas
As economic news has moved from bad to worse over recent months, significant population shifts are occurring throughout the country that will markedly impact the commercial real estate investments over the coming years. Moreover, amidst these shifts, the decade’s population growth has slowed to the lowest level in the past 50 years, all of which points up the need for commercial real estate investors to identify the segments of the population that will have a measurable impact on how things in the real estate world evolve. Those segments, as Nielsen Claritas sees it, are the Baby Boomers, born between 1946 and 1964; Generation X, born between 1965 and1976; and an older Generation Y group born between 1977 and1985 that we have dubbed iM Dotcomers.
The Baby Boomer generation, whose oldest members turn 63 this year, is one of the largest population groups, accounting for 26 percent of the almost 115 million U.S. households. Based on numbers alone, this graying population’s decisions about housing, retirement and shopping experiences will exercise powerful influence on future retail development. Here is what we know: The vast majority of Baby Boomers live in suburbia, view moving as disruptive and, as a result, are expected to gray-in-place. Therefore, suburban markets, those offering affordable housing in such areas as the popular Sunbelt, will continue to be the fastest-graying markets. Boomers, who value active lifestyles, will pay extra for convenience, require safe environments and place a premium on easy access to healthcare.
Generation X and the iM Dotcomers also carry significant clout. Together, they represent almost 30 percent of the nation’s households and, through their most predominant population group, the ethnic population, are responsible for the majority of new household expansion that, according to a 2008 Nielsen Claritas study on retail growth, can be found in the United States’ top urban centers, as well as gateway cities like San Diego and San Antonio, Texas.
Expectedly, this growing ethnic landscape also includes immigrants, and no group has provided more of a population boost than Hispanics, a market that is growing three times faster than the U.S. population in general. This immigrant population and the Asian population are settling in places where friends and family have already formed self-sustaining ethnic communities. For Hispanics, those areas tend to fall along the border with Mexico, while Asians typically head to large metropolitan areas like Los Angeles, San Francisco and Miami.
Copyright Commercial Property News 2009. Used with permission.