Active adult senior housing continues to generate intense interest from investors and builders across the greater real estate industry.
Newcomers to the space include multifamily developers and operators, but a growing number of senior housing developers and operators are gravitating toward active adult as well — including Allegro Senior Living and Vitality Living.
These companies are finding success with new developments, and believe that their expertise in higher-acuity senior living give them some advantages, leaders with the Allegro and Vitality said during Senior Housing News’ recent Active Adult Virtual Summit.
These players are emboldened by the tenant profile, primarily seniors in their 70s, many of whom are still working but wish to embrace a maintenance-free lifestyle, said Jamie Lemon, vice president of operations at Allegro Senior Living.
The St. Louis-based provider has a portfolio of 12 senior housing communities — half of which are active adult properties. Five of the six operate under the Avidor brand, including Avidor Evanston in Evanston, Illinois, the winner in the “Best Active Adult Design” category in the 2020 SHN Architecture & Design Awards.
“We felt it was a great option for people that are younger, looking at independent living and feel like they’re not ready [for higher need product] yet,” he said.
A new care continuum addition
In many ways, active adult communities are taking over the role assumed by independent living in the care continuum 20 years ago.
Typical active adult consumers’ age ranges from the mid-70s to early 80s, but they are relatively healthier than people of identical age in prior generations. Many boomers turning 75 today have gone to college, traveled, and lived in other communal settings such as dormitories or apartment buildings.
That experience, coupled with demanding tastes, will help inform the layout and scale of future active adult communities, intended to encourage socialization and engagement between residents.
Allegro was approached by real estate developer High Street Residential about entering the active adult space in 2018. Allegro has experienced the acuity creep within independent living in recent years, and believed that Avidor would complement its existing communities.
“We tend to offer a higher-priced product, and we felt it fits in great with our portfolio,” he said.
Active adult development has been in Vitality’s plans since the company’s founding four years ago. The Brentwood, Tennessee-based company owns and operates a portfolio of 28 communities across the southeast, and is a recent entrant to the active adult space with three communities in Georgia, Louisiana, and Mississippi.
Before taking the leap into active adult, Vitality conducted focus groups and surveys to determine its target renter profile. The provider found that 92% of respondents expressed a need for quality retirement living. Of that number, two-thirds indicated that they would consider active adult housing, and more suggested they would entertain a move within two years.
From there, Vitality asked more detailed questions about prospects’ lifestyles, what they wanted to see in an active adult community, and what would prompt them to consider a move. The information gleaned from this allowed the provider to create content, educating consumers on what Vitality’s active adult communities are truly about. Much of this content centered on blog posts, and through paid media and social media channels.
“The question is always, ‘Where do you find that younger customer and if who would be willing to consider a lifestyle like this,’” Podewitz said.
Deliberate market selection
Successful active adult developers are very deliberate in determining target markets for the product.
Market selection is one of the linchpins in Allegro’s success with its Avidor communities, usually near high-density urban or downtown suburban areas. As an example, Avidor Evanston is located in the heart of the city’s downtown, providing residents with access to entertainment, restaurants, shopping and cultural destinations, highlighting the lock-and-leave lifestyle these communities promote.
The overall footprint and unit mix is similar across Allegro’s Avidor communities. Buildings typically house between 150 to 200 apartments in one- and two-bedroom layouts, and are designed to complement an active, modern lifestyle that promotes independence, interaction and socializing with peers.
Continental breakfasts and concierges are common features, along with on-site “resident experience directors” who coordinate wellness activities, field trips and cultural programming. Amenities can include a pool and spa, private dining and liquor lockers, gourmet grilling stations, rooftop decks with fireplaces, fitness centers and wellness rooms, and yoga gardens.
All of this is done with minimal staffing — Avidor communities typically have up to eight full-time employees including community directors and assistants, resident experience directors, program directors, maintenance supervisors and technicians, and two full-time sales team members, Lemon said.
“We feel that this has been an acceptable number for staff to be available if residents need something,” he added.
Vitality’s market strategy varies, depending on the market. One of its communities, in Madison, Georgia, is a horizontal, patio-style home development that features unique layouts putting a premium on shared spaces for socializing. Copeland Tower, a repurposed hotel in Metairie, Louisiana, offers one- and two-bedroom units.
Vitality staffs each with sales directors and associates, community managers, housekeeping, maintenance, engagement, activity and concierges. Concierge service at Copeland is available 24 hours. Additionally, the development has 24-hour, full-time security.
Amenities include a full fitness center, a range of activities, and a juice and coffee bar. Additionally, residents receive to use at their discretion.
“We’re looking for the amenities to match the lifestyle,” Podewitz said.
The active adult learning curve
While Lemon and Podewitz see active adult as a component of the senior housing continuum, these communities are distinct, and there is a learning curve for senior living providers used to higher levels of care.
For example, the resident profile and therefore the sales process is quite different.
Health care is not the overriding factor for residents of Vitality Living’s active adult communities, Chief Sales Officer Julie Podewitz said.
“These are very active adults,” she said.
Podewitz and Vitality’s sales teams are focused on why residents and prospects consider moving to an active adult community. Because many prospects are still working, the lifestyle these communities offer is an attractive value proposition. Residents no longer need to concern themselves with property taxes on single family homes, maintenance and repairs, and being able to lock up and leave at their convenience.
The sales process for active adult shares differs in some ways from traditional senior living. Lemon noted that Allegro’s marketing budgets for its active adult communities are more robust early in the process, in order to solidify the brand awareness and educate the consumer on the product.
Another difference is the target demographic. Operators in the space prefer to market directly to the prospect, instead of the adult children.
“[That’s because] they’re still working [and] making their own decisions,” he said.
Vitality looks for community managers and sales leaders who are very focused at identifying prospective residents and are able to close a sale, once identified. But the process is not boilerplate, and varies by market.
“We’re looking for a different customer. The question is always, ‘Where do you find them?’” She asked.
But while the catalyst behind a move to active adult is different, an emotional component behind a move is still there. This makes the experiential component inherent in senior living even more important in an active adult setting, Podewitz noted.
“As much as somebody who would consider this really gets excited about [active adult], there’s the reality of leaving home. That’s still the pain of change,” she said.
Once prospects truly understand what active adult senior living offers, the sales process speeds up significantly from inquiry to move-in. Allegro averages 30 days from initial inquiry to deposit on its active adult product, and another 60 from deposit to move-in.
“Once people really understand the product, [the sales process] is much faster than we anticipated,” Lemon said.
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