It’s time to set the record straight: “55-plus senior living communities” are a myth.
These so-called “independent living communities” are advertised as appealing to a younger demographic of seniors, with lively, fit 60-year-olds often seen playing sports and socializing in their marketing materials. Yes, these communities exist, and yes, their residents are over 55—but, in most cases, they were 55 at least 15 years ago.
“55-plus is really 55-plus-plus-plus,” Dan Hutson, chief strategy officer at California-based Cornerstone Affiliates, tells Senior Housing News. Cornerstone Affiliates is the parent company of non-profit senior living companies American Baptist Homes of the West (ABHOW), Beacon Communities, Inc. and be.group, as well as the for-profit firm Seniority, Inc.
Several experts agree with Hutson, though that’s not to say age-restricted rental communities don’t have a place in the current real estate landscape. A 55-plus age-restricted rental community is more of a multifamily product, as opposed to a “senior living” product with service offerings. The opportunity for these communities exist, leaders argue—but attracting 55-year-olds is not realistic.
‘Real’ 55-plus senior living residents
If 55-year-olds aren’t moving into these age-restricted rental communities, then who is?
“Hopefully, it’s that 70-something who’s still in good physical and cognitive shape,” Hutson says. “I’m 56, and there is no way in hell I would ever live in a community that labels itself, in any way, as senior living—and I work in senior living.”
Plenty of people in their 50s and even into their early 60s are still working, or even still raising children, Hutson points out. They don’t need assistance with activities of daily living, nor do they want their meals prepared for them. Age-restricted communities, then, are more appealing to empty-nesters who don’t want to live in an apartment with a bunch of “20-somethings.”
“I see it as more of a product that’s geared toward people who want to live in a multifamily environment but don’t want kids around,” Hutson says.
In fact, the typical customer is a 70-year-old to 73-year-old woman, according to Dale Boyles, managing director, senior housing, at Phoenix-based multifamily real estate firm Alliance Residential Company. The resident’s move into an age-restricted community is primarily driven by lifestyle, he tells SHN, noting that the resident likely desires convenience to shopping, theaters and restaurants.
Most 55-plus communities, in other words, offer residents convenience, socialization and the safety of likeminded neighbors—the choice to move into these communities is lifestyle-driven, not needs-driven.
Prime demographic opportunity
At this point, it goes without saying that the U.S. population is aging rapidly. This, in part, is contributing to the development of 55-plus communities nationwide, according to Beth Burnham Mace, the chief economist at the National Investment Center for Seniors Housing & Care (NIC).
“When you look at the surge of the baby boomers, people are looking at 55-plus communities as a good opportunity today,” Mace tells SHN.
Economic trends have also impacted the space, Hutson notes.
“I think one of the reasons you’re seeing this growing proliferation of 55-plus is because you’ve got all this pent-up capital looking for places to invest now,” Hutson says.
Age-restricted rental communities are geared toward people who are “really at the top of their earning game,” he adds—and that can be an attractive prospect for developers.
“It becomes very enticing,” Hutson says. “You’re not providing a very complex service package, it’s primarily a real estate play—it’s bricks and mortar, so it’s easy for investors to understand—you don’t have the licensing, you’re not operating in the same regulatory environment.”
Historically, people in their mid-50s to mid-60s have opted to buy properties in age-restricted communities, rather than choose to rent apartments in age-restricted buildings, Boyle explains. Many existing age-restricted apartment buildings aren’t necessarily attractive, either.
“The 55-plus rental product tends to be more on the affordable side, in the $800-$1200 range, with a pretty vanilla or Plain Jane type of design,” Boyles says. He believes that multifamily real estate developers have a leg up on other developers looking to enter the 55-plus rental space—even senior living providers.
“You take a multifamily developer, and everything we do is through the lifestyle lens,” Boyles says. “We have a great product, amenities, gyms, we’re fashion-forward. My opinion is that we have a competitive advantage.”
Alliance is currently looking to develop “55-plus” communities across the country, with the goal of completing between three and five projects annually, or bringing about 1,000 units online per year.
Written by Mary Kate Nelson