ATLANTA — Seniors housing operators and developers are facing pressure to adapt as a new category of lower-acuity housing rises in popularity. The new player in the seniors housing game — active adult — is undercutting independent living developers by appealing to a slightly younger population of empty nesters and retirees.
Active adult housing refers to residential communities designed for residents age 55 and older, but often do not have a strict age restriction. These are multifamily or single-family homes that often include amenities typically enjoyed by older residents, such as golf courses and clubhouses, but do not market themselves as full-fledged seniors housing. Independent living communities are structured similarly but often carry a strict age restriction of approximately 65 years old, and will sometimes offer basic assistance such as dining or laundry services.
Independent living developers often struggle to attract residents when their target demographic of able-bodied senior citizens moves into nearby active adult communities 10 years early. Many of them will not move again until they are ready for assisted living or skilled nursing.
“Independent living residents haven’t changed; the places where they are residing and the services they want that have changed, but we have stayed the same,” said Richard Hutchinson, CEO and president of Discovery Senior Living, referring to developers of independent living communities. “Residents still want to do all those things that 20 years ago people in independent living communities wanted, but we have to figure out how to provide those services ourselves.”
Hutchinson spoke on a panel titled “The Power Panel: CEO’s Discuss The State of the Industry” at InterFace Seniors Housing Southeast, along with Brian Beckwith, CEO of Formation Capital; Stephanie Handelson, CEO of Greystone Health Network; Robb Chapin, partner and CEO of Bridge Investment Group; and Doug Schiffer, president and COO of Allegro Senior Living. JP LoMonaco, president of Valuation and Information Group, moderated the panel.
France Media’s InterFace Conference Group and Seniors Housing Business hosted the one-day conference at the InterContinental Buckhead Atlanta on Wednesday, Aug. 28. More than 430 professionals attended a full day of panel discussions and networking opportunities within the seniors housing sector.
According to Hutchinson and the rest of the panel, seniors housing developers and operators must fulfill location and amenity desires to attract residents to a modern independent living community.
“If we don’t defend our space, the multifamily folks will muscle their way into that demographic boom,” he said.
Activating independent living
As a hybrid between multifamily living and true seniors housing, active adult housing tends to attract able-bodied seniors who want to maintain a dynamic social life. Many of them still work part- or full-time, and they enjoy an evening out and an activity-rich weekend. Residents who join active adult communities may remain there for a decade or more and only move to independent or assisted living when their health needs force a change.
“People are waiting longer before they are interested in this housing type, and many are coming in frailer and more stationary than we used to see,” said Schiffer. “The industry has now created a wider spectrum of ways to cut seniors housing, and I see active adult being very similar to independent living but with a more modern flair.”
Schiffer said that Allegro Senior Living is integrating more complete kitchens and dining rooms into its independent living units in an attempt to encourage more social interaction between residents. One problem with independent living communities is that they tend to be isolated from other businesses and attractions residents might want to visit, so developers like Discovery Senior Living are trying to embed their communities within urban and suburban lifestyle centers.
“In Daytona Beach, Florida, they are building One Daytona (a mixed-use development) with attractions like restaurants and theaters all in one place. We want to build our communities in areas like that, where there are multiple places for residents to go,” said Hutchinson. “We can’t by ourselves provide all of the amenities they want, but we can try to build near them. That way we can give them what they want and still charge a reasonable rate.”
An active and aware population
The incoming generation of senior residents is more educated and aware of the services being offered. Easy access to the Internet has enabled seniors to research and compare their retirement options. This incoming generation of seniors will steer clear of their neighborhood retirement community if it doesn’t fulfill their needs and desires. With even more savvy adult children advising their aging parents in housing selection, the onus falls on housing developers to compete for residents.
“They know a lot more about the business now than they ever have before, and they are aware of the competition,” said Beckwith. “They have access to information, and they can give feedback. It’s important to have someone on staff who can communicate with residents and make sure we are giving them the best experience, or they will go somewhere else.”
The panel agreed that the seniors housing industry currently does a fine job servicing the medical needs of elderly residents (age 80+), who typically require more skilled medical and day-to-day assistance than active adult and independent living residents. For the most part, those practices are standardized across higher acuity facilities. The selling point for lower acuity populations, the panel said, is the quality of social experience offered.
“Many developers come into seniors housing with a preconceived notion of what their residents want, but usually the reality is completely different,” said Handelson. “People are living longer now than they used to, and the new generation is more active and aware than before. Using focus groups, data analytics and personal feedback, seniors housing developers can work with residents to fulfill all of their needs.”
— Alex Patton