It's no secret that a cuddle from an animal companion can help calm away the frazzle of a busy work day, but it seems that dogs and cats have pulled out all the stops during the pandemic, providing much-needed companionship to people across the nation. A recent survey from the American Society for the Prevention of Cruelty to Animals (ASPCA) tells the story in numbers: 23 million households (about one in five) added a cat or dog during the pandemic. And despite reports to the contrary, 90% of those dogs and 85% of the cats are still in those homes.
According to the American Veterinary Medical Association, over 48 million dog-owning households had an average of 1.6 dogs, and almost 32 million cat-owning households had an average of 1.8 cats prior to the pandemic. These newest figures represent a huge increase in pets needing absolutely everything from squeaky toys to rabies vaccinations and socialization time with their own species.
What does any of this have to do with real estate? Everything. This huge influx of animals into pandemic life means that there is massive demand for veterinary services, groomers, pet stores, dog-friendly retail and hospitality -- the list goes on and on. Even residential landlords should be considering just how pandemic pets will affect their businesses going forward.
Why companion pets could drive the next real estate boom
The pet industry has been steadily growing and looking more like a solid investment. Even before the pandemic, the American Pet Products Association reported that in 2018, owners spent $90.5 billion (that's with a "b") on their pets. By 2020, that number was $103 billion, and 2021 is estimated to come in over $109 billion.
Those numbers are at least in part due to the increase in pets being added to homes, causing ripples throughout the industry. For example, in 2020, pet foods and treats accounted for $42 billion of those dollars and are estimated to make up $44.1 billion in 2021. Vet care is also growing as a share of expenses, with $31.4 billion spent in 2020 and an estimated $32.3 billion in store for 2021. "Other services," which includes recurring items like grooming, boarding, pet sitting, and daycare, accounted for $8.1 billion in 2020 and will likely be at $9.7 billion by the end of 2021.
Even if you've never considered how effectively puppy dog eyes can melt a person's very soul (and open up their wallets), it may well be time to consider investing in the pet industry. Dogs and cats can both easily live over a decade when given proper care, with 10 years of food, supplies, entertainment, healthcare, social activities, and cosmetic visits to budget in. Older pets need more of these things, and even though many animals are adopted as adults, allowing owners to skip the very expensive younger developmental phases, old age waits for us all.
The Millionacres bottom line
I firmly believe that pet-related real estate will be a huge place for growth as the massive wave of pandemic pets matures and ages. Veterinary practices that are currently overwhelmed may well spur more people to enter the industry in a few years, and certainly, large, enterprise-size practices will be looking for new places to build and expand into. The same goes for pet stores.
But these obvious things are far from the extent of the reach of these packs of pandemic pooches (and kitties). Pet-friendly spaces have been an emerging trend for some time, but an explosion in companion animals is also about to spell an explosion in demand for places owners and dogs can go together to have dinner, hang out with their friends, or stop for the night on a road trip.
There's also a takeaway for landlords in this data. If you own a large complex, it's going to be important to work some pet-friendly infrastructure in. Add a private community dog park, or if you're building from the ground up, walking trails and other green spaces that pets and owners can appreciate.
You may be inundated with rental applications right now, but this explosive rental market can't last forever, so planning for and constructing more pet-friendly amenities will help you remain competitive as the market cools. The 90.5 million homes in America with a pet, representing 70% of U.S. households, will appreciate your efforts.