Avenida Partners has been on the leading edge of the growing active adult rental market, with a pipeline of ground-up development projects. Now, Avenida will expand that development platform through a newly formed venture with Winter Properties, a vertically integrated real estate investment, management and development company.
With Avenida already having undertaken nine projects, the “time was so right” for the next stage of growth, Avenida Founder and Managing Partner Robert May told Senior Housing News.
The Winter partnership is “key to growth for enterprise support, and to be competitive in today’s land acquisition market, where timeframes are shorter and cash requirements are higher,” he told SHN.
The partnership is targeting six starts per year and aims to reach that tempo by 2025. The focus will be on markets in the western and southeastern United States.
A colleague from the multifamily industry who successfully partnered with Winter first connected May with the New York City-based firm. Winter is a related business of Standard Industries, a global industrial company with a range of holdings, technologies and investments.
“At Winter, we partner with best-in-class sponsors with proven track records and compelling growth strategies,” said Rick H. Singer, president of Winter Properties, in a press release. “Avenida is a perfect example of this, and we look forward to a successful partnership with them.”
Expanding the Avenida platform
Newport Beach, California-based Avenida’s active adult properties feature an array of amenities, such as a morning/evening bistro, movie theater, creative arts center, fitness rooms and other reception and common spaces. Buildings typically range between 140 and 160 units.
As is the case even among higher-acuity senior living providers, Avenida is making efforts to serve both middle-market and more affluent consumers.
At middle-market Avenida communities, monthly rates are expected to average about $1,850 a month, whereas rates range between $2,100 and $2,200 per month in higher-end buildings, May said during the 2021 Senior Housing News Active Adult Virtual Summit.
Just last week, Avenida opened its first middle-market community, located in Hendersonville, Tennessee. The community is being managed by multifamily giant Greystar — another pioneer of active adult rental housing — and bears Greystar’s Album brand.
“Greystar has put together an active adult team that are hall of famers … that has such extraordinary promise to deliver the lifestyle and the operating efficiency that’s going to make an active adult product really a viable product going forward into the future,” May said.
Given this high esteem, May is open to working with Greystar on additional projects, but decisions about community management will be made on a case-by-case basis.
“We believe that we should focus on what we do well, from site selection to project entitlement, design and development, and bring in an experienced operator who really understands active adult,” he said.
Avenida does provide a corporate resident enrichment director who collaborates with the Greystar team to support and ensure delivery of the firm’s lifestyle programming.
May anticipates that about two-thirds of the future pipeline will be focused on the middle market. Two middle-market projects — one in Fort Myers, Florida and one in Carrollton, Texas — will begin construction in the first quarter of 2022. An upscale Avenida-branded community will get underway this quarter in Folsom, California.
These projects will mark Avenida’s entry into the Florida and Texas markets; also this year, Avenida will start on its first project in Phoenix and a third Colorado project. Overall, the current development pipeline will take Avenida into eight states and reflects over $350 million in total capitalization.
Adding senior living talent
At the same time that Avenida is partnering with Winter, the company is growing its team. Douglas Allen has joined Avenida’s Nashville office as Managing Director-Southeast. Dick Baummer has joined the firm to provide land acquisition and pre-construction management in the Carolinas and mid-Atlantic states.
In addition, Kimberly Hynek joined the Newport Beach office as COO and partner.
All these team members have extensive experience in the senior living industry. Hynek served as CFO of Oakmont Senior Living; Baummer was a VP with Harbor Retirement Associates (HRA); and Allen held leadership positions with Senior Star and Fortress Investment Group, which at the time owned Holiday Retirement.
Avenida was intentional in tapping senior living talent, May said. These hires balance the fact that many people in the company come from the multifamily world, with experience in land acquisition, construction and other facets of real estate development.
“What we’ve learned in our nine operating projects is that we need to embrace the fact that our residents are seniors — our average age is still a youthful 74, but it’s so important that our leadership understand who our market is, and who our consumer is, because we want to deliver the very best product that’s a blend between multifamily operations and senior living lifestyle,” May said.
The active adult market has expanded rapidly in recent years, as the leading edge of the baby boomer generation has driven demand. But Avenida has been focused on this segment longer than many other developers now targeting the space; today, the firm has a formula that has been 10 years in the making and is adjusting that formula for its different market segments, May said — and he is bullish on the future prospects for Avenida and active adult generally.
He cites transactions that have occurred in the last six months, which have involved high-quality institutional and strategic investors and attractive cap rates.
Such deals “have confirmed the underlying fundamentals of this age-restricted, lifestyle-oriented kind of product,” he said, crediting “the quality of the tenants and the resiliency that they’ve demonstrated through the Covid nightmare.”
The post Avenida Partners With Winter Properties To Drive Active Adult Development, Adds Senior Living Talent appeared first on Senior Housing News.
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