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Q1 Outlook: RVs, SPRING BREAK, AND SUBURBAN OFFICE BUILDINGS

After attending the Birmingham RV Super Show at the BJCC in February, the idea of taking my family on an RV adventure began to burrow into my brain like an earthworm in summer soil. I became obsessed with RVs. Websites with names like rvforum.com, rvtalk.com, and airstreamclassifieds.com consumed my free time.

In doing the research I learned a lot about the RV industry. So much for my perception of RVs being for the 65+ crowd . . . Today the average buyer is 48 years old, and the fastest growing age cohort is 35-44. But younger buyers are looking for different features in an RV than their older predecessors were. They want a cleaner and simpler look than the typical RV . They want features that help them live an active lifestyle, and they want an RV that will last. Airstream has been manufacturing their iconic travel trailers since 1929, and the market has swung back in their favor in recent years. Of late they’ve seen a huge resurgence in buyers, and sales increased by 26% from 2013 to 2014. Airstream is building exactly what the younger set wants—form, function, nostalgia, and a durable product.

A shift is also happening in how people RV. RV-ers are more active and some RV parks are now offering gyms, fitness classes, and bike rentals. As I set out on this learning adventure, I began to see a corollary to the commercial real estate business. Markets are changing for us, too.

At a local coffee shop recently, an older real estate professional was holding court with his buddies. They asked him to predict the next wave of properties that would hit the auction block. He said, “That’s easy suburban office buildings.” His reasons were simple and are becoming a common refrain: Millennials want an urban environment. They want to be in the middle of entertainment, restaurants, culture, and recreation. And a suburban environment can’t provide those amenities within an easy walking distance.

What’s old is new again; the resurgence of city centers is like the resurgence of the Airstream market.

Which brings me back to the RV story . . . My wheels were turning even faster, and I was ready to join this burgeoning market myself. The more I read, the more I could see my family vacationing this way. Vignettes of my children making lifelong memories while discovering crawdaddies in mountain streams and sleeping in compact bunk beds propelled me to rent a 36-foot Class A RV for our spring break trip. This would be a proof of concept test-run to show my wife how much we’d enjoy this new way of life. We’d then figure out which one to buy and hit every state in the union on an RV-fueled, memory-making march across America—cue Paul Simon.

For those of you who don’t know, my wife Rushton and I have 5 kids ages 10 and under.

Well, the trip didn’t exactly get off to the dreamy launch I’d imagined. We were behind schedule before we left Birmingham, which put me in a ‘tense’ mood. And a tense mood is probably not the best state of mind for piloting a 36-foot RV for the first time. After a wrong turn in south Georgia onto an unmarked dirt road at dusk, my mood went from tense to toxic. Toxic Dad doesn’t equal happy childhood memories. We arrived at Georgia Veterans State Park at dark. The low that night was 42 degrees, and for some reason I could not get our gas to turn on, so we had neither heat nor hot water.

Things got both better and worse as the trip rolled on. Better as I became more acquainted with the RV’s
systems and how things worked. Worse as seven people living in such a tight space progressively adds
more and more dirt and mess as the days add up. We visited an RV park directly on the beach in San Destin, and as much as I tried, I lost the battle with sandy feet.

The last destination of our trip was to be a two-night stay in south Alabama. I had read online about a kid-friendly RV park that decorated for each season. Upon arrival we felt like we’d found the Easter Bunny’s nest -if he lived in Gatlinburg. A little kitsch and a lot creepy.

The next morning I texted a friend who had inquired about our trip: “It started out strong but today I woke up in a trailer park in Mobile with my five wild, shirtless kids running around me.”

Instead of spending the second night in Bunnyland, we drove home. On the way back, the air conditioning
broke and I became the stereotypical shirtless RV driver with windows down and the curtains flapping in the breeze. Memories were made, mission accomplished.

Later back in my office, reflecting on my launch into the RV market, my thoughts drifted again to the coffee
shop meeting with the wise real estate colleague. He’d asked a question that had me pondering in new ways: “Who are your tenants and how old are the owners of those businesses?” Just as there’s a new generation of RV enthusiasts, it’s a new generation of tenants, too. My colleague’s big point was well taken: Customers will change, and the new ones probably won’t be looking for what the old ones did. Get ready! Real estate may move at a snail’s pace, but it does move and change. Are you keeping up with it?

For some pictures from the RV Trip, click here.

After attending the Birmingham RV Super Show at the BJCC in February, the idea of taking my family on an RV adventure began to burrow into my brain like an earthworm in summer soil. I became obsessed with RVs

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by Derek Waltchack
04.28.2015