As a developer, understanding which trends are desirable for your target demographics is a surefire method to increase ROI in a development project. A target market has expectations, and delivering, or even surpassing, these expectations means that you can leverage high performance design for premium business opportunities.
This is the first article in our ongoing series on development trends around the North Gulf Coast. In this series, we will cover the trends that are affecting the commercial real estate development industry, such as rooftop amenities, certain aspects of high-performance design, and the value of mixed-use structures. If you have found this information of use, you may find the rest of the series beneficial as well.
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In many cases, trends are a subsection of a shift in the market – for example, while rooftop amenities are increasing in demand, a rooftop gym could be considered a trend. The population is shifting further towards living spaces that incorporate new amenities and high-performance qualities, such as natural light, integrated systems, and technological advancements. Each of these trends are viable options, but the trick comes in choosing the right match of each for the environment and its demographic.
In the following set of articles, we will cover certain aspects of these market shifts that have proven to be more than simple fads. Knowing which of these trends are rising and how to use them is a great way to add market-proven value.
Understanding the target market
Different demographics follow different trends -most could expect that someone with a family would prefer a different home than a millennial with a disposable income and few family responsibilities. This means that narrowing down who it is that you are selling to and what position they are in life is crucial to matching design with demographic.
In the case of the previously mentioned millennial, if they have graduated from a good college within the past few years, they may be interested in resort-style amenities. This could be a condo with a nice view, plenty of natural light, high-performance features, and shared spaces. By narrowing down a market’s needs, a developer could learn that investing in adding certain amenities will prove beneficial for a product.
When deciding on amenities to incorporate in a commercial development project, it is important to shift the economic model accordingly. A set of amenities may shift the original budget or lower the potential bottom line based on initial unit cost, but if they were incorporated to attract a target demographic, then the added quality leverages a greater payoff – both in ROI and in brand recognition.
Meet the market’s perception of value, and you can leverage the proforma’s parameters to an optimized combination. This perception of value means that the projections for tenant satisfaction increase dramatically and the rate of vacancy stays a static low.
In the following set of articles, we will cover four shifts in the real estate market and some of the trends that are associated with each. Please join us in our next article where we discuss rooftop amenities.