general sep2320101200 pcbc-gen-y in the marketplace - underwood-6!17!09 [compatibility mode]

7/30/2019 General Sep2320101200 PCBC-Gen-Y in the Marketplace - Underwood-6!17!09 [Compatibility Mode]

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Generation Y in the Marketplace

PCBC | June 17, 2009Terrye Underwood, Senior Principal


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ABOUT OUR FIRM

RCLCO is a leading real estateSERVICESCorporate Strategic

intelligence, strategy, andMarket & EconomicResearchProject Segmentation,

industry since 1967Positioning & Pricing

Fiscal and Economic

Impact Analysis

Acquisi tion & Disposit ionStrategies

Workouts & Restructuring

Transaction, Structuring &Investment Analysis

Asset Management

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eve opmen erv ces


3/18

GEN Y HAS THE LARGEST SHARE OF THE U.S.POPULATION, FOLLOWED BY BABY BOOMERS

How Many?Gen Y: 80 Million

What are the doin in the REVast majority renting.

market? homes in 2012+

Where do they want to go?

n own areas, c ose owork, mixed-use

environments

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SOURCE: RCLCO Consumer Research


4/18

GENERATION Y: AT A GLANCE

Who: Ages 13- 30 in 2009 (born in 79 through 96)

Likes: Free content, telecommuting, everything social," ",

Dislikes: Anonymous mass-marketing, beaten paths,restricted access

The most connected generation in our history Constant flows of information

Highly productive, but place critical importance onbalancing work and life g va ue pace on s ayng connec e w ren s

and family

Hobbies: Googling, social networking, supporting acause, creating global change

Hangouts: Facebook, Mom and Dad's place, dive bars,all-age shows

Tap that wallet!: $200 billion in annual earning power

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an growngSOURCE: Iconoculture, RCLCO


5/18

GEN Y IS OUTWARD LOOKING AND CIVIC-MINDED

Gen Y is the most civic-minded generation

61% of 13- to 25-year olds feelpersonally responsible for making adifference in the world;

81% have volunteered in the past year

Gen Y will want these values to extend into

the corporate structure of their builder ordevelo e

69% consider a company's social andenvironmental commitment whendeciding where to shop; and These numbers reflect the can-do spiri t

w rus a company more ssocially/environmentally responsiblepopulation(theyre) volunteering at alevel and intensity we havent seen since

the 1940s (Howe & Strauss, 2005)

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SOURCE: USA Weekend, 2005 and Cone, Inc. 2006


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GEN Y REPRESENTS EARNING POWER OF $200BILLION ANNUALLY AND GROWING

Generation Y Baby Boom

o ay s

Population

~ on ~ m on

% TodaysPo ulation

30% 25%

% earn above$75,000

35% 40%

Earning ~$200 Billion ~$2 Trillion

Overall, it is estimated that Generation Y

power

in luences as much as hal o all spending inthe U.S. economy

Gen X earning power, by comparison,

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SOURCE: Harris Interactive and the U.S. Census


7/18

GRADUATES ELIGIBLE FOR THE RENTAL MARKETIN 2009; BUYING COULD ACCELERATE IN 2012

4,100,000

4,200,000WAVE OF GEN Y

3,800,000

3,900,000

, ,

3,500,000

3,600,000

, , should begin in

2012

3,400,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Number of 22-Year Olds

41% of Generation Y plan to rent for at least threeyears

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NOTE: Number of 22-year olds is based upon birth rate and does not factor in death rates and migration.SOURCE: U.S. Centers for Disease Control and Prevention; RCLCO Consumer Research


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RCLCO GEN Y CONSUMER RESEARCH

~80 Mil lion = Gen Y (and ~ 52 mill ion Gen X)

Representative of census regions Received approximately 3,200 survey responses 50% of those surveyed were Gen Y and 50% were

Studied Gen Y individuals who were 20-28 years oldat the time of the survey

Survey was made up of: Renters Owners Future Shoppers

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9/18

INTEREST IN CLOSE-IN NEIGHBORHOODS ISHIGHEST

Location:

-followed by urban locations

Those in the Northeast have the leastinterest in moving to urban locations and

-

Most interest in cities is in the Southregion

Of those movin to cities, most arechoosing to do it in the South

Much of this is likely due to affordabilityissues

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10/18

GEN Y WILL PAY FOR WALKABLE, MIXED-USE

Walkability:

Driven by convenience, connectivity, and ahealthy work-life balance to maintainrelationships

1/3 wil l pay more to walk to shops, work,and entertainment

is important

More than 1/2 of Gen Y would trade lotsize for proximity to shopping or to work

Even among families with children, 1/3 ormore are willing to trade lot size and idealhomes for walkable, diverse communities

prefer characteristics of urban places,particularly walkable environments

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11/18

FAMILY CHANGES AND NEEDS

Family Changes:

once they have kids

Only half are confident they will need a single-familyhome once they have kids

Improving schools is the highest community priority formore than half of Gen Y

Diversity is key. Gen Y wants diversity in housingtypes, styles, groups of people, and householdcomposition.

Over half report that having a community and homedesigned to meet certain "green" objectives plays animportant role in their purchase or renting decision.

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12/18

GREATEST PREFERENCE FOR SINGLE-FAMILYHOMES ON SMALL LOTS

Product Types:

35% prefer a SFD on a small lot

- However, given the choice between thistype of home and the ability to walk butwith a smaller lot, 71% choose the

- Families will sacrifice yard, but nothome quality/space

11% want a condominium

10% prefer townhomes

While Gen Y prefers SFD, the majority donot yet have the resources to afford this

housing to remain popular with this group

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13/18

CHANGING CONSUMER PREFERENCESINCREASING PREFERENCE FOR DENSE PRODUCTS

Housing Preferences

United States

Preferred Housing Type ExistingPreference Share of FutureDemand GEN Y DEMAND**

Attached Housing 25.4% 38% 34%

Apartments 14% 13%

Condominiums 9% 11%

Townhomes 15% 10%Small-Lot DetachedHousing (< 1.6 Acre)

20.5% 37% 35%

Large-Lot DetachedHousing

54.2% 25% 31%

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SOURCE: Arthur C. Nelson et. Al, Leadership in a New Era, 2006** RCLCO Consumer Research 2008


14/18

LIFESTYLE AND LOCATION IS REQUIRED FORWORK-LIFE BALANCE

Gen Y:

ees wor - e a ance or wor - e en as

important. Theyll work from home, enrolltheir kids in their companys in-house daycare, and enjoy portable careers

Are multitaskers - theyll get the job done,and theyll probably do it in less time, butnot at the expense of balance

50% will choose a less-than-ideal home ifthey can walk to work allows for shortercommutes and more me time

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SOURCE: Franciscan Skemp Health Care and Gundersen Lutheran Medical Center


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AMENITIES REDEFINED; MORE FOCUS ONWORK/LIFE BALANCE

Amenities:

Given the interest in community involvement andwork/life balance, the amenities Gen Y values

most are in contrast to much of what is beingdeveloped today:

- Librar ;

- Restaurant or caf;

- Main street village;

-

- Fitness center.

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16/18

IMPLICATIONS

Intown areas and inner suburbs will remain on an

Diversity, walkablity, and proximity to jobs will bekeys to site selection and premiums

Renters will represent a steady stream of demand

Gen Y will shift toward homeownership in 2012

Product types will remain smaller and affordable

and should have focus on design over size

The suburbs will need to evolve to remainattractive to Gen Y

More walkable areas, including new andexistin town centers

Master-planned communities with greatervariety of product types and higher connectivity

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17/18

IMPLICATIONS

What locations can you leverage or purchase forfuture development?

How does this chan e our marketin messa e?

What modifications can be made to current orplanned communities to make this more

appealing to Gen Y?ow oes s a ec your curren s ra egy

Are you prepared for the wave?

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18/18

Generation Y in the Marketplace

PCBC | June 17, 2009Terrye Underwood, Senior Principal

general sep2320101200 pcbc-gen-y in the marketplace - underwood-6!17!09 [compatibility mode]

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