Anyone have experience in this space? Currently considering a ground-up development of one but having an incredibly hard time finding good information on the space and who the leading players are. The most active operator in the space I could find is Greystar (Overture / Everleigh).
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More familiar with traditional senior housing (independent, assisted, etc.) but know this space a little as well. Greystar is definitely the most active developer and operator/manager, huge portfolio of that stuff. A few others I can think of off the top of my head...Avenida Partners, Clover Group, Sparrow Partners, Treplus Communities. On the equity front Carlyle has been a big time investor in this asset class and it seems like Welltower is starting to dive in more as well, particularly at lower price points. Newmark has been the most active broker on dispositions from what I can tell, imagine if you dig around their site or maybe CBRE you could find a report on the asset class.
This is incredibly helpful, so thank you. I will look into some of the other firms you've named. For the Newmark investment sales team, are the lead brokers Ryan Maconachy and Chad Lavender? Or is it a different team?
Also, I would love to get your take on how the current economy would effect 55+ consumers when deciding whether to rent (or buy) in an active adult community or whether to delay that decision until the economy stabilizes. If I were a 55+ consumer with a paid off home or sub-3% mortgage, I would be far more willing to age in place rather than move into a community where rents could increase 3-10% in perpetuity.
Interested for others to weigh in...
Chad and Ryan are the ones he is talking about. My firm has an IL portfolio and we have periodic calls with them, definitely know the senior housing ecosystem very well. Typically have great analytics and market reports that they're willing to share.
Don't think it will impact the sector too much. The thing is that while 55+ is the age restriction from a legal standpoint, the average age in most of these communities is in the low to mid 70s. If these places attracted more late 50s/early 60s then I think it'd be more likely for those folks to hit pause on a downsize during economic turbulence, but to me a 75-year old's decision is going to be less impacted by that environment. They've likely built up significant equity in their home, have been living on a fixed income for decent period of time (which obviously won't change much in a recession), etc. Also at that age keeping up with the house gets to be more and more of a pain literally every day. I also think any negative impact brought on by an economic downturn would be more than offset by the overwhelming demos. The oldest boomers are hitting their mid-70s, the prime age for these communities, and there still is not nearly enough supply. I'm a huge believer in the asset class, it's a way to capitalize on the baby boomers aging without dealing with the operational intensity & labor challenges that comes with assisted living or skilled nursing.
Harold Gary Morse was the largest player when he developed The Villages in central Florida. Make sure there's a golf course nearby lol.
The Villages is an incredibly built project. For the development we're considering, it's far smaller than the villages. It's more of a single site in the exurbs.
Totally as an aside, it's amazing that these things are even legal, and that there's no political pushback to their legality. Age is a protected category under civil rights law when it's 57-year-olds getting fired from their tech jobs due to age, but it's fine for 35-year-olds to be discriminated against on behalf of 57-year-olds in the case of housing. There's no legitimate basis for this. If anything, the opposite should be true, since younger people are less likely to form families if they're overly burdened by high real estate prices.
It is an interesting concept that somehow this flies. I'm with you on that.
However, on the price point, I want to say that most of these are priced at a premium to non-age restricted. Can anyone weigh in on this?
Anecdotally, I don't see a significant price difference. But on the for-sale side, at least, they have a reputation for taking longer to sell. Younger people are more likely to have hard deadlines (beginning of kids' school year, start of a new job) that force them to settle on new housing in a fairly short period of time. Empty nesters who may or may not be retired usually aren't under any pressure. Some banks don't like doing construction loans on 55+ developments for that reason.
On the rental side, the question would be lease-up duration.
Rule of thumb I have always heard is that that rental age-restricted is generally priced ~20% (probably +/- 5%) above comparable traditional multi. I am unfamiliar with how it compares on the for-sale side. Tangibly, they're paying more for some sort of activity program that you would not get in multi (movie nights, in-community classes, etc.) as well as maybe a free continental breakfast once or twice a week. Intangibly, the resident base has shown the willingness to pay a premium to live with their peers. The social aspect is a huge selling point and folks have been willing to pay for it.
what's the appeal of a 55+ community?
I don't really get it. lonely old people trying to get with other lonely old people?
I get nursing / retirement homes where you don't have the capability to take care of yourself.
But to pursue a community that is age restricted when you have all your bearings?
Don't get it.
but i'm not a booma.
Old people tend to downsize anyway. And I’d be willing to bet most people here are in their late 60s rather than their 50s.
Also how many apartments have you lived in where there was a neighbor with a crying baby, college kids throwing parties at 2am and trashing the amenities, young couples having loud sex or getting in arguments, etc. Even without the extra amenities and the social aspect I bet some of the older people enjoy living without young, loud people
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