If projection from the latest Organization for Economic Co-operation and Development report on the future work force is true, it is not good news for office buildings.
The OECD Employment Outlook 2019 is part of the OECD’s Future of Work initiative and the “I am the Future of Work” campaign, which aims to make the future of work better for all, helping to transform learning and social protection systems and reduce inequalities between people and across regions.
“The OECD Employment Outlook does not envisage a jobless future. But it does foresee major challenges for the future of work,” said OECD Secretary-General Angel Gurría, launching the report in Berlin with Hubertus Heil, Germany’s Federal Minister of Labour and Social Affairs. “With the right policies, we can manage these challenges. We face significant transformation, but we have the opportunity and the determination to use this moment and build a future of work that benefits everyone.”
The digital transformation, globalization and demographic changes have already been reshaping the world of work, the report said.
OECD is an intergovernmental economic organization with 36 member countries, including the United States, founded in 1961 to stimulate economic progress and world trade.
“Looking ahead, 14% of existing jobs could disappear as a result of automation in the next 15-20 years, with another 32% set to change radically,” the report said.
While full-time, permanent employment is likely to still account for many, if not most, jobs in the future, the past few years have seen a further rise in non-standard work in some countries, such as self-employment and temporary contracts, the report said.
“Part-time employment has risen in virtually every OECD country over the past few decades. The share of people who work part-time but would prefer to work full-time has also risen in two thirds of OECD countries for which data are available,” the report said.
By: Boston Real Estate Times
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Archives for April 2019
Millennials Tried to Kill the American Mall, But Gen Z Might Save It
Gen Z keeps confounding Corporate America.
They’ve shunned beer, they want companies to take political stands and they trust Kardashians to make their makeup choices. But perhaps the biggest surprise about this new cohort of teenagers is the most unexpected of all: They love the shopping mall.
Around 95 percent of them visited a physical shopping center in a three-month period in 2018, as opposed to just 75 percent of millennials and 58 percent of Gen X, according to an International Council of Shopping Centers study. And they genuinely like it; three-quarters of them said going to a brick-and-mortar store was a better experience than online, ICSC found.
“There’s always been this assumption that as you go through the age spectrum, the younger consumer that has grown up with online and digital and is very savvy would shun physical experiences,” said Neil Saunders, an analyst at GlobalData Retail. “But actually that’s not turned out to be the case.”
Gen Z—or the group of kids, teens and young adults roughly between the ages of 7 and 22—still appreciate brick and mortar. But they aren’t just millennials living in a different time. Today’s teens interact differently with stores than their older siblings and Gen X parents before them, and several retailers who didn’t understand the fundamental differences in how they shop landed themselves in bankruptcy court: Think Charlotte Russe, Wet Seal and Claire’s, once staples of the teen mall circuit.
Failure to adapt to changing trends and stay relevant can crush a business, with regional mall vacancy rates at 9.3 percent in the U.S. But get it right, and savvy apparel companies could capture some of the generation’s expected spending power of about $143 billion in the U.S. alone. Here’s a look at some of the ways retailers are keeping up:
1. They Don’t Fight the iPhone
Gen Z spends a lot of time on their smartphones—and they know it: Nearly six out of 10 self-diagnose overuse, according to a recent survey by Bloomberg and Morning Consult. For companies that embrace that, instead of fight it, the payoff can be huge.
Forever 21, consistently ranked among American teenagers’ top brands, rewards phone-in-hand shopping by offering customers 21 percent off if they snap a picture of themselves in a Forever 21 outfit and post it with designated hashtags—then show the cashier at the register. And they do it: On Instagram, the #F21PROMO has been used about 20,000 times, mostly by teenage girls striking a range of poses from sitting on a bench with a Starbucks drink in hand to throwing up peace signs. One poster on Twitter, who hid her face with her baseball cap, wrote “my mom is making me do this for 21% off.”
Tech companies are responding as well. RetailMeNot, a digital coupon provider, is able to send push notifications to shoppers when they’re in a mall to alert them to potential discounts. A recent survey from the startup found that an overwhelming 91 percent of Gen Z shoppers are searching for deals on their mobile phones while inside retail locations.
Nimble retailers are making their stores more Instagram-worthy in a bid to appeal to this connected crowd. About a third of Gen Z consumers say shopping should also be entertaining, according to data from Cassandra, a cultural insights and strategy agency. With these Gen Z shoppers in mind, old-guard department store Macy’s Inc. earlier this month rolled out in 36 of its locations “Story,” a colorful themed shop-in-shop. In its behemoth Herald Square store, the 7,500-square-foot space is brightly painted with primary colors, a pillar completely made of Crayola crayons, a pingpong table and a rainbow tunnel.
Story is filled with knickknacks like hot dog-shaped pet toys, purses that charge phones and self-help books on how to cure hangovers, which Macy’s Chief Executive Officer Jeff Gennette describes as items “nobody needs’’ but are “going to want’’ once they walk through the spot. Every two months, the space undergoes a complete overhaul and introduces a new theme. That means repainting walls, installing new carpets and designing new opportunities to post on Instagram. It’s a neck-breaking pace for retail.
“You just don’t have the same predictability that you have in some of the department store square footage,’’ Gennette said in an interview at the flagship store. “You can always show up and find something different.’’
2. They Let Them Customize It
Gennette’s onto something: Different is the name-of-the-game for these young adults. Nearly half of Gen Z shoppers want products tailor-made to their tastes and interests, according to a 2018 report from IBM and the National Retail Federation. To be sure, previous generations personalized their apparel and accessories in ways they wanted, like adding patches and buttons. The difference for this generation is that retailers have more technology already in place to acquiesce to their requests right from the start.
“In the past, it has been a little more cookie-cutter,” says Marcie Merriman, an EY consultant who specializes in the Gen Z consumer. Now for today’s teens, “their mind just goes to a very different place because of their expectation that anything is possible.’’
In some American Eagle Outfitters Inc. stores, shoppers can take their jeans to a counter and get them embossed, attach back patches and add paint. Champion, the activewear company owned by Hanesbrands Inc., trained store associates to heat-press and embroider its iconic “C’’ logo and brand name anywhere consumers want on their sweatshirts and hoodies upon request. Levi Strauss & Co. put tailor shops in most of its mainline stores to entice consumers to add monogram stitching to the brand’s trucker jackets and iconic jeans—which CEO Chip Bergh admits weren’t popular with millennials, including his own sons, but are having a comeback.
Tiffany & Co.—a go-to jeweler for rite-of-passage gifts like Sweet 16 celebrations, proms and graduations—is not just engraving initials into pieces of silver bracelets and necklaces anymore. Last year, it heavily invested in its “Make It My Tiffany” program in a bid to reel in this generation of shoppers. “You can have your bracelet, ring or piece of jewelry personalized,’’ CEO Alessandro Bogliolo said. His 14-year-old daughter, for example, has a piece of jewelry with her pet on it.
3. They Don’t Think Secondhand Clothing Is Second-Rate
Gen Z, just coming into its spending power, is looking for a good deal. Bonus points if the product is also sustainable. That group is turning to reused clothing at the quickest pace, according to Thredup’s 2019 Resale Report, with one in three Gen Z shoppers expected to buy secondhand this year.
That has some unlikely players getting into the mix. High-end department store Neiman Marcus just made an unexpected move: buying a minority stake in Fashionphile, an e-commerce company focused on pre-owned luxury handbags and accessories. While the used luxury products will still be sold on Fashionphile’s website, in the next year Neiman will open about five to seven in-store showrooms for customers to receive a quote on the used items they want to sell. Down the line, Neiman hopes its involvement in the reused market could convert young shoppers interested in used items to loyal new-product customers, CEO Geoffroy Van Raemdonck said in an interview.
“The customer who participates in buying secondhand products are younger,’’ he said. “That’s usually their first time of entering the luxury market, and we aim to introduce them to Neiman Marcus—and ultimately to transition them to buying products of the season at Neiman Marcus. It’s clearly a recruitment effort.’’
Saunders, the analyst at GlobalData Retail, said more companies need to start thinking outside the box to attract this important demographic.
“The more traditional retailers haven’t really thought about this particular generation as an attractive target. They haven’t really thought about what this group wants out of a shopping experience,” he said. “I think that’s starting to change now.” —With Tiffany Kary, Lily Katz, and Kim Bhasin
By: Jordan Holman (Bloomberg Businessweek)
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What Features Do Apartment Renters Value Most?
A survey from Greystar looks at the most popular apartment building amenities.
To attract residents, apartment managers are mixing amenities like swimming pools with activities like fitness classes.
“It isn’t enough to have the fitness center, clubhouse, pool mix… Instead, provide these as services that busy millennials and active boomers want,” says Tara Jeffcoat, senior research analyst for research firm Yardi Matrix, based in Scottsdale, Ariz.
“It isn’t enough to have the fitness center, clubhouse, pool mix… Instead, provide these as services that busy millennials and active boomers want,” says Tara Jeffcoat, senior research analyst for research firm Yardi Matrix, based in Scottsdale, Ariz.
To get the right combination of apartment amenities, services and features, developers and property managers need to look at research on what their residents want, so that they can tailor the properties to their local apartment markets.
Providing services rather than spaces
Overall, apartments residents are especially interested in swimming pools—in both warm and cold climates. Swimming pools were among the most preferred amenities for renters surveyed for recent survey of resident preferences by multifamily operator Greystar. Even if renters can’t use their community’s swimming pool all year round, “you appreciate it more when you can,” says Quinn Eddins, assistant director of research at Greystar. He presented the firm’s survey at the 2019 NMHC Research Forum, held by the National Multifamily Housing Council (NMHC) on April 2 in Denver.
Developers make these amenity spaces more attractive by scheduling programs that activate the spaces. “Especially in high density areas, new construction increasingly features more programmatic and active amenities… approaching amenities as a service instead of a space,” says Jeffcoat.
Apartment developers are now focusing more on incorporating multi-use common spaces into their buildings—for example, by combining the leasing and business area with a rideshare pick-up and drop-off zone, says Greg Willett, chief economist with RealPage Inc., a provider of property management software and services. “Developers realize they need to build common area spaces with flexibility, so that it won’t be a big deal to repurpose an area as a property’s resident base evolves or renter interests shift.”
When it comes to choosing which types of amenities to include, different groups of renters may have different preferences. For example, as a group, renters have neutral feelings about the inclusion of dog parks in their apartment communities, according to Greystar’s survey. But certain renters place a high value on pet-friendly features. “In many places, especially in the upscale communities, it’s very important to pamper the pets,” say Willett. “Renters who care about pet-focused amenities at all usually place lots of value on those features.”
And some renters might prefer to have fewer amenities if it cuts the cost of their rent.
“Rent savings are becoming increasingly important in the class-B product sector, where budgets are becoming more stretched,” say Willett. As a result, sometimes a building with fewer amenities and a lower rent will have fewer vacancies. “Apartment owners sometimes can boost revenues by leaving out amenities that would drive up rents.”
Inside the apartments, renters want quiet
Soundproofing is the most valuable apartment feature that renters consider when they decide whether or not to sign a lease, according to Greystar.
“Soundproofing has universal appeal,” says Willett.
Other top features included in-unit washers and dryers, balconies, hardwood floors and stainless-steel appliances, according to Greystar’s survey. Other experts note the attraction of a place to eat—though not necessarily a full dining room.
“An eating area/breakfast bar also universally holds strong appeal,” say Willett.
Renters don’t seem to care as much about features like gas stoves, mudrooms and Bluetooth sound systems, which scored much lower on Greystar’s list. However, there was some geographic variation. For example, gas stoves were more popular in the West, Midwest and Northeast. Floor-to-ceiling windows were more popular in the Northeast and major Midwest cities.
Air conditioning can also be a required feature in places with hot summer weather. “Air conditioning really moves the needle on performance in markets where some properties have AC and others don’t,” say Willett.
By: Bendix Anderson (NREI)
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Realtors® Report Value in Promoting Green Features in Both Residential and Commercial Listings
With Earth Day right around the corner, members of the National Association of Realtors® are doubling down on their commitment to promote environmentally friendly home features, adopt green business practices and encourage a culture of sustainability in real estate. With this in mind, NAR is releasing the REALTORS® and Sustainability 2019 Report, which found that consumer demand in real estate continues to trend eco-friendly.
The report, found at www.nar.realtor/research-and-statistics/research-reports/realtors-and-sustainability, is in its third iteration and stems from NAR’s Sustainability Program. It surveyed Realtors® about sustainability issues in the residential and commercial real estate markets and the preferences they are seeing in consumers in their communities.
According to the report, 59% of respondents found that residential consumers were very or somewhat interested in sustainability. Seven in 10 residential and commercial agents and brokers reported that promoting energy efficiency in listings is either somewhat or very valuable.
“The state of the environment is important to our members and their business practices, and the report shows that sustainability impacts consumers’ home buying decisions as well,” said NAR President John Smaby, a second-generation Realtor® from Edina, Minnesota and broker at Edina Realty. “Realtors® remain on the cutting edge of sustainability and continue to lead the conversation about energy efficiency in real estate.”
A large majority of respondents (83%) said that solar panels were available in their markets, and 36% said that solar panels increased the perceived property value. However, only 8% of those surveyed said that solar panels decreased the perceived amount of time a home spent on the market. Solar panels are most prevalent in Northeast (available in 94% of markets) and respondents in the West were the most likely to report they increase perceived property value (41%).
Twenty-five percent of brokers indicated that tiny homes – homes that are 600 square feet or less – are available in their markets, a 2% increase from 2018. Only 13% of respondents said that wind farms were available in their markets.
The transportation and commuting features that Realtors® stated are very or somewhat important to their clients include: easy access to highways (82%), short commute times and distance to work (81%) and walkability (51%) – the same as 2018.
Forty-one percent of respondents were aware that their Multiple Listing Service, or MLS, has green data fields, compared to only 14% that were unaware. Among those that do have green data fields, 35% of respondents use them to promote green features, 26% use to promote energy information and 14% use to promote green certifications.
Realtors® also revealed how comfortable they are answering questions about home performance and efficiency; 39% said they are comfortable or extremely comfortable. Forty percent of respondents say they are confident or extremely confident in their ability to connect clients with green lenders; only 6% responded that they are not at all confident.
When asked what they consider as the top market issues and considerations regarding sustainability, agents and brokers named understanding lending options for energy upgrades or solar panels (38%), the lack of information and materials provided to real estate professionals (32%) and improving the energy efficiency of existing housing stock (31%).
Respondents were also asked about sustainability in commercial real estate. Seventy percent of agents and brokers indicated that promoting energy efficiency in their commercial listings was very or somewhat valuable. Sixteen percent of respondents reported that their Commercial Information Exchange had green data fields and that those fields promote energy information and green features. The top building features that clients specified as very or somewhat important to their agents or brokers were utility/operation costs (81%), efficient use of lighting (67%) and indoor air quality (64%).
NAR initiated the Sustainability Program as a platform for dialogue on sustainability for Realtors®, brokers, allied trade associations, and consumers. The program’s efforts focus on coordination and articulation of NAR’s existing sustainability resources, while also supporting a growing area of interest for consumers, helping members to assist home buyers and sellers.
The REALTOR® Sustainability Program invited a sample of 112,035 active Realtors® to participate in an online survey pertaining to sustainability issues facing consumers and the industry, resulting in 6,047 usable responses. NAR plans to use this report to better benchmark Realtor® understanding of sustainability and create resources to help Realtors® better serve clients surrounding sustainability topics.
By: NAR
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