Correction: An earlier headline inaccurately listed the money spent by young professionals.
Dive Brief:
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Young professionals between the ages of 18 and 44 and living in Lower Manhattan splash out $356 million a year on dining and entertainment, but roughly 55% ($195.8 million) of that spend goes to establishments in other neighborhoods, according to a new report from the Downtown Alliance, which manages the Downtown-Lower Manhattan Business Improvement District.
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Apartment inventory has doubled in Lower Manhattan since 2000, although more than 75% of the neighborhood's square footage is still commercial, Crain's New York Business reported.
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On average, the 30,000-strong group of young, downtown residents goes out 16 days each month, spending nearly $1,000 each for drinks, dining and entertainment. These young professionals are typically unmarried and not burdened with childcare costs, but lack enough in-neighborhood dining and entertainment options to keep their spending close to home.
Dive Insight:
As part of its report, the Downtown Alliance encouraged business owners to increase the number of restaurants, bars and entertainment venues in Lower Manhattan in order to tap into that ready demographic.
The Downtown Alliance is seeking to capitalize on what developers and businesses of all kinds have known for some time: The success of their operations is increasingly dependent on the millennial demographic, a group larger than even the baby boomers. One characteristic of this cohort is that they value a sense of community, which has driven them to urban cores with high walkability and vibrant neighborhoods. Even when they choose to settle in the suburbs, millennials, as well as other age groups, seek out those spaces that will provide an urban feel. Michael Breclaw, with FitzGerald Associates Architects, in Chicago, told Construction Dive in June that mixed-use developments are meeting that need.
Historically, millennials have been willing to pay the same or a little more for less living space, as long as that space is in major cities like Seattle and New York, where employment, transit, entertainment and other basic needs are proximal. Developers of microunits — usually 350 square feet to 550 square feet — have tried to create a formula that will appeal to that market. The for-sale angle hit a wall when a Houston developer missed its microunit presale target to such a degree that it decided to abandon the concept altogether. However, in New York City, the Carmel Place for-rent microunit development has, so far, been a deemed a success, particularly with its smattering of below-market-rate units.
According to architect David Senden, partner at international design firm KTGY, people of all ages today approach for-sale spaces differently than they do for-rent situations. A property purchase as opposed to renting, Senden told Construction Dive in August, requires a deeper financial and time commitment that requires them to consider long-term needs beyond proximity to an urban environment.