The Newest Real Estate Influencers: PETS!

Yes, you read it right. According to the 2021-2022 APPA National Pet Owners Survey, 70% of U.S. households own a pet, which equates to 90.5 million homes. This means that many residential real estate transactions involve pet owners who will consider pets’ needs as one of the key factors, but a pet-friendly house is not everything when it comes to dog ownership these days. Dogs now attend daycare to socialize and exercise with their best friends! As such, dog daycares, especially after the COVID-related dog ownership spike, are popping up everywhere. What should commercial real estate agents consider when assisting their clients?

The pet market has been one of the most vibrant and steadily growing industries in recent years, mainly due to higher awareness of the benefits of pet ownership, specifically stress reduction, and increasing per capita disposable income. Throughout the pandemic, while we were stuck at home and in desperate need of companionship, shelters and pet stores nationwide reported a surge of dog adoptions and purchases. Many of these dog owners, especially first-timers, ignored the practical consideration of pup ownership when adopting during the pandemic. Specifically, they failed to consider what their pup will do home alone when everyone goes back to work.

This is where dog daycares come into play. While boarding services have significantly dropped during the pandemic, the demand for dog daycares escalated, especially after the work-from-home orders started being lifted. The increased need for dog daycares has turned a niche market into a legitimate commercial real estate trend.  The biggest problem is space. Many businesses have special considerations for their locations, but few have more than a dog daycare facility. Here are some of the most crucial ones:

  • Zoning – dog daycares are a relatively new concept so most towns/cities do not even have them in the building code which means you might be required to apply for a use variance.
  • Location – the most important factor! If your focus is mainly on daycare and not boarding service, the key is to find a location within highly dense areas, as people are not willing to drive or deviate from their commute by more than a few miles. If you are looking more for a full-service facility with outdoor runs, then you need to search for abandoned warehouses (super expensive now!) or large plots of land in the cheaper outskirts. In both cases, you want to make sure it is a high disposable income area.
  • Size – there are economies of scale, so size really does matter here. Whether you are looking for a 2,000 or 4,000 SF facility, you will need to consider a reception area, prep area, breakroom, groom room, mop room, office, and restroom.
  • MEPs! – Building’s mechanical, electrical and plumbing conditions will have a significant impact on the cost of the build-out. Dog daycare facilities require special knowledge of ventilation, construction materials, equipment, cleaning, operations, and disease transfers. It is critical to understand all these aspects to properly assess the site and address those issues in the design. For instance, if you are looking to lease a site in a multi-tenant building and there is no dedicated HVAC unit for the space, this would be an immediate no-go. Engage with architects and engineers who have dedicated groups that only focus on pet care facilities.
  • Sound control –A dog’s bark can be between 60 and 110 decibels (or more) in volume. As such, sound absorption/proofing is something that needs to be considered when evaluating a site. Sound vibrations can and do travel through concrete so just having concrete walls might not be sufficient. If there are residents above the space, you will be required to also soundproof the ceiling which can easily double construction costs. Soundproofing is one of the most expensive variables which might push you towards more of a suburban site vs. a downtown location.

To summarize the above, if you are looking into opening a dog daycare to take advantage of the increasing demand, make sure you engage a commercial real estate agent familiar with a pet industry early in the process to ensure that you are finding the ideal space. Once your space is secured, work with an engineer and architect who have expertise in the pet care industry, as this will save you from experiencing potential unforeseen costs or operational issues.