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Millennials change face of commercial real estate

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When Jean Kane attended her first NAIOP meeting, she was surrounded by white men wearing blue suits.

She said she felt intimidated — and says even now, as one of the top women in the industry, she still is sometimes — but she found a way to connect with those in the commercial real estate development association and move her way up.

“You can make it happen. You have to work at it, but you can make it happen,” Kane said during the fifth annual Women in Real Estate Conference presented Wednesday by the Burnham-Moores Center for Real Estate at the University of San Diego. The event also included a panel discussion on millennials.

Now the CEO of Welsh & Colliers International in Minnesota and the 2014 chairwoman of NAIOP, Kane shared her views about how commercial real estate is changing and becoming more diverse.

“I do believe having that diversity makes you a better business,” she said. “It’s not some lofty ideal.”

The more perspectives an office has from people from different backgrounds, the more potential solutions they can come up with, Kane said; stereotypes need to be broken, and the industry needs to be inclusive. She said she also supports professionals reaching back to help those in their industry, no matter their level.

A diversity report from August 2013 said 78 percent of senior executives in commercial real estate are white men and 14 percent are white women. The U.S. working population with four-year degrees, however, has a vastly different makeup: 37 percent white men, 38 percent white women and 24 percent men and women of other races.

More than half of the current presidents and CEOs will retire by 2020, and by 2016, millennials will dominate the workforce, bringing with them new workplace traits that differ from previous generations.

Office spaces are shrinking as the number of people sharing the space increases. These employees use new technologies and digital products that change communication.

“If people are changing, and space is changing, we’ll have to change to keep up,” Kane said.

Some companies are making the shift to meet the demands of their millennial employees — those between the ages of 19 and 36 — who usually want instant gratification in many aspects of life, have a hopeful outlook, want to work remotely, and like open office designs.

San Diego ranks third among the top markets for millennials, following Austin, Texas, and Salt Lake City, said Bess Wakeman, executive vice president of JLL and moderator of the millennial discussion.

Wells Fargo Bank (NYSE: WFC) begins looking for new talent while students are sophomores in college, said Kelly Souza, a senior vice president for Wells Fargo Commercial Real Estate. If all goes well, the company brings them back for a second summer program and makes an offer before the student’s senior year.

"It’s really a race for everyone to get the best and the brightest and the most diverse population,” Souza said. “And as a result of that, it’s pushing us to search early on in the process."

Wells Fargo tries to communicate with millennials on their level, has launched a social media campaign, and shares videos that make the company relatable to their generation, Souza said.

Finding that right fit is important to millennials, who are apt to change jobs often. Some who graduated during the Great Recession and settled for jobs that weren’t their first choice are looking elsewhere, said Kimberly Clark, an associate with Voit Real Estate Services.

Clark, who holds a law degree, said many former classmates who envisioned law as rewarding have left their high-salaried jobs for ones that are more fulfilling.

“If a millennial isn’t having that sense of fulfillment that a job can bring, then they’re going to look for it somewhere else,” Clark said. “There’s a huge emphasis in being really happy with what your job is. Maybe that hasn’t been as important to other generations.”

The physical space of an office is also important to millennials. Melissa Scofield, an associate with CBRE (NYSE: CBG), a commercial real estate firm, described the company’s internally branded Workplace 360, which focuses on technology, collaboration, space use and mobility. Employees have stand-up desks, standardized technology that allows them to move among desks, and smaller conference rooms.

“It’s bright, it’s white, it keeps you stimulated,” Scofield said about the downtown location. “Quite frankly, it’s not just millennials that value this. CB found everyone is realizing this is something they like.”

Clark said as a broker, she sees that layout is important to clients, who value open space that fuels collaboration. Glass offices are more common, and parking requirements are increasing, as companies opt for more people in smaller spaces.

Souza said Wells Fargo is lending more aggressively to properties that offer modern spaces with a focus on sustainability and long-term value.

When Daniele Horton found difficulties meshing her personal needs with a traditional corporate office schedule and protocols, she opened her own sustainability consulting firm, Verdani Partners.

“It was a typical corporate America job, with cubicles, individual offices,” Horton said. “We had to be there at a certain time, we had a very strict dress code … and it was fine, I had a great career, it was a wonderful opportunity.”

But when she had a second child, she needed more flexibility. “I created that kind of culture that I thought was important that would help retain people and retain talent,” said Horton, who employs people in several states, and values untraditional meetings.

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