Retirement communities have long established themselves in Florida — one of the many states in the Sun Belt — but the area is now attracting a different kind of community: the niche retirement community.
While tried-and-true senior housing options are still big players in the market, with thousands of facilities in the state, some operators are taking a different approach in carving out segments of the 50-plus population, marketing to a sliver of the demographic in hopes of attracting a very targeted resident base.
And they’re finding it works.
ShantiNiketan, Nalcrest and Lake Weir Preserve are three such communities that have tapped a growing need for hyperfocused senior living options, catering to those with Indian roots, former postal carriers and retirees with a love for their RVs, vintage car collections and the like.
By narrowing their focus, these niche retirement communities each find success in different ways. One has thrown out its advertising budget, relying mainly on the work of its target market to spread the word. Another has boasted occupancy numbers in the high-90s. And the third has found that its market to be millions-strong — and untapped.
But these communities are “just the tip of the iceberg,” says Iggy Ignatius, chairman and founder of ShantiNiketan, a community marketed toward Indian-Americans.
“The niche community market is becoming [more popular] because the need is there,” he says. “The market is not huge; it’s a limited market, but it’s definitely a very strong market.”
Ignatius started ShantiNiketan in 2008 when he acquired land outside of Orlando, Fla., in nearby Taveras. The community, whose name translates to “peace house,” has been successful thus far in reaching its target audience of retirees with Indian origins, though it’s still in its development stages.
“The concept really is something that’s tailor-made to the first generation of immigrants,” Ignatius says. “Most first-generation immigrants always have a desire in their heart to want to go back to their land of birth. Basically, we created what they were looking for in India.”
ShantiNiketan began with 54 independent living condos, which were completed in phase one of the community’s development in May 2011, which cost $8 million. The second phase, including 120 condos with a price tag of $20 million, will be completed in July 2015, though about 80 of these are already open. The third phase, a 600-condo addition projected to cost in excess of $100 million, will begin next year and will likely take several years to complete.
Aside from its initial marketing efforts, the community has not had to advertise its condos in order to generate buzz. Instead, ShantiNiketan has relied on its target demographic to spread the word.
“The first four years I had to advertise a lot, but after the community opened, because it was a small market — 90% of the Indian market knows us and what we do — we really don’t have to advertise,” Ignatius says. “Most of our sales are done through word of mouth.”
No bank loans were used to build ShantiNiketan. Between 25% and 40% of the condos were pre-sold to residents who paid the cost of the condo upfront, which then became the capital to build the rest of the project. The community, in turn, shares its profits with those original investors.
“I do not believe in getting outside financing for retirement projects, because in 2008 when we started phase one, we were on the verge of [getting financed] when the market collapsed,” Ignatius says. “You could lose everything when the market collapses like that. So the community funds the development, and a market crash will not affect our build-out.”
ShantiNiketan has a steady stream of residents and visitors throughout the year, with the highest concentration of residents in the winter months.
Some move in right away with the hopes of living there as long as they can; some buy a condo and live there during the winter months, eventually moving in permanently after a few years; and still, some buy a condo and use it as their winter home with no intention of moving in full time.
All of the community’s condos are currently sold out, though many residents don’t physically live in them year-round. Year-round occupancy is about 40% to 50% and peak winter occupancy is 90%-plus occupied, Ignatius says. Residents pay $200,000 for a 1,000 square-foot two-bedroom, two-bathroom condo — more expensive than area competitors. Because it is a niche community that provides a cultural atmosphere for Indian-Americans, Ignatius can charge a premium for the condos.
“Our selling price is 10% to 20% higher than the market price. What we are selling here for $200,000 you can buy for $150,000 across the street,” he says.
One thing that consistently attracts residents to ShantiNiketan is the community’s Indian food. It offers an array of meals, including rice dishes with traditional Indian sauces and stews.
ShantiNiketan is in the process of expanding elsewhere nationwide. It’s in the land acquisition stage in New Jersey and in preliminary stages of expanding in other areas, including Detroit, Columbus, Chicago, San Francisco, Los Angeles and Phoenix.
“There are probably about 200,000 to 300,000 retired Indians [in the U.S.] and what we are catering to is much less than 1%,” Ignatius says. “So the market [potential] is enormous, and that is why we are going to other towns and cities.”
Polk County, Florida-based Nalcrest caters to a much different audience: retired postal carriers who are part of the National Association of Letter Carriers (NALC) union.
Nalcrest — whose name stands for National Association of Letter Carriers Retirement, Education, Security and Training — is a 500-apartment retirement community owned and operated by NALC.
The association set out to provide affordable housing to its union members 50 years ago, when Nalcrest began renting to residents.
“People feel safe there and can communicate with each other about the union and about politics and other things,” says Matty Rose, president of the Nalcrest trustees. “They have a like basis. They were all letter carriers, or the vast majority of them.”
Sitting on 153 developed acres are 66 housing facilities containing the 500 units, mostly one-bedroom apartments, starting at $395 per month. The union does not subsidize the rent directly, but residents do benefit from the past union wages, Rose says.
“With all the amenities free and use of the property free, no maintenance fee, and the resident pays only electric and rent, they benefit from past union wages and benefits,” he says.
The community, which is currently about 97% occupied, was originally funded through the U.S. Department of Housing and Urban Development (HUD). With its mortgage now paid off, it is funded through rental income.
Lake Weir Preserve
Lake Weir Preserve, formerly named Lake Weir Living, markets itself as a “toy-friendly” baby boomer community in central Florida. It caters to the demographic of boomers and recent retirees who have RVs, boats, classic cars, motorcycles, ATVs and other vehicles that require special storage.
Still in its development stages, the project is expected to be a 500-custom-home development built over several phases. Though currently in its first phase, Lake Weir has built and sold 26 custom homes, now occupied by the home buyers.
At the head of the project is Neil Schuster, co-managing partner at Lake Weir Preserve, who owns the 400 acres of land that the community sits on in Ocklawaha, Fla.
For Schuster, choosing to target a niche market took some research.
“It was important not to have a niche that was too narrow to go to market,” he says. “As I researched the numbers of boomers and retirees, I started to see that we’re not just talking about a couple hundred thousand people.”
The number of RV-owning households grew to 8.9 million in 2011, up from 7.9 million in 2005, meaning that 8.5% of U.S. households owned an RV. The number of baby boomers who own boats is less clear, but projections range from 10 million to 17 million. In addition, of the roughly 5 million collector cars in the U.S., 58% of them were owned by baby boomers, according to 2014 data.
“So when you add up all the numbers, it’s quite a compelling market that’s not being served,” Schuster says.
About three years ago, he began marketing the property to this cohort, who could choose from one of several custom floor plans, then modify it to meet their needs.
One of the most important elements of the floor plan is the garage, which will need to house large RVs, car collections or workshop space. Size varies depending on the home buyer’s preferences and vehicle type, but garages can be as large as 2,000 to 4,000 square feet, sometimes as large or larger than the living space of the home, Schuster says.
Smaller three- to four-car garages, not built for large vehicles, can also range from 900 to 1,500 square feet.
So far, of the 26 custom homes at the retirement community, the smallest living space is about 1,300 square feet with a 960-square-foot three-car garage. The largest home has 2,700 square feet of living space plus a 2,500-square-foot garage.
Prices of the homes start in the $190,000 range and can cost as much as half a million dollars, depending on customization and square footage.
“Ultimately, the home that they can build is limited simply by their imagination,” Schuster says. “It’s what they want that will drive [the price].”
Home buyers at Lake Weir Preserve are typically cash buyers, meaning that no loans are involved in the financing of the homes.
The homes are built individually once the buyers sign off on their designs. Construction usually takes about six months after the design is finalized.
While there are no shared amenities or buildings for the residents of Lake Weir Preserve, one thing does bring the community together: its shared passion for “toys.”
“The market always speaks,” Schuster says. “People have been very responsive to what we’re offering.”
Written by Emily Study