Active adult developer Avenida Partners has plans to scale up its portfolio of active adult rental communities with four new ground-up projects per year. And the Newport Beach, California-based firm says their product stands as an option for older adults who aren’t ready to financially commit to an independent living community.
Avenida has completed four active adult communities, with three currently open in Oklahoma City; Franklin, Tennessee; and Lakewood, Colorado. The fourth was a community in Tulsa, Oklahoma, which it sold in 2017.
The company has three more communities under construction, in the Chicago suburb of Naperville; Germantown, Tennessee; and Palm Desert, California. Avenida also has a planning pipeline with opportunities it’s looking at in states such as North Carolina, Connecticut, Kentucky, Alabama and Wisconsin and metro areas such as Chicago, Denver and Nashville.
All told, the company hopes to start development work on four more rental communities per year, with a planned pipeline totaling at least $200 million annually for five years, with a focus on the West, Midwest and Southeast U.S., according to Matthew May, project manager, and Robin Craig, senior vice president of sales and marketing with Avenida.
Active adult properties are gaining popularity across the senior housing industry, with a product that meets some of the demands of younger seniors while avoiding operational risks that traditional senior housing operators face. A recent survey of investors by real estate services firm CBRE (NYSE: CBG) found the property type could even disrupt industry norms if the trend continues unabated.
Looking at the pool of incoming residents to Avenida properties, it’s easy to see why the growth of this product type could impact independent living in particular.
As one might expect, the lion’s share of people moving into Avenida’s rental active adult properties are coming from single-family homes. Some of them are moving from independent living to active adult.
Roughly 60% of Avenida’s move-ins come from people who previously lived in single-family homes, and 15% came from multifamily properties. Another 20% come from independent living.
“When we go into new markets and our rent is half that of independent living, there’s a huge value proposition to those seniors that are already in the senior housing space,” May told SHN.
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The affordable nature of active adult communities — which don’t need to employ caregivers or provide the same level of service as more traditional senior living providers — is one possible reason why residents go from independent living to active adult.
Monthly rates at Avenida properties range on average between $1,800 and $2,600 per month. Residents must also pay a one-time move-in fee of $1,000.
“This product type, there’s a high value to it when people look at this compared to independent living,” Craig added. “We have to hit that sweet spot where that value stays prominent in people’s mind.”
And the model appears to be working in attracting younger residents. The average age of Avenida’s residents is in the low 70s, while the current average age of move-ins for senior living is generally accepted to be 83.
“It takes a lot of education of these customers, but when they get it, they really get it,” Craig said. “It’s an exciting time to be in this space.”
Still, although it does draw some independent living residents, Avenida considers itself more of a compatible offering rather than directly competitive.
The Avenida model
As it scales up, Avenida is looking at markets where a high number of seniors are already accustomed to rental properties, such as Northern California, Colorado and the Carolinas.
While Solvere Living currently manages the property in Oklahoma City, Avenida Management Services — an entity the developer created — will manage the other communities as they open.
Avenida is generally looking to develop communities that have between 140 and 160 units, with amenities such as a fitness center, yoga space, club room, theater and a grab-and-go bistro. Where demographics are robust, the company has larger communities, as exemplified by Avenida’s 230-unit community in Lakewood.
Floor plans range in type and size, with a variety of one- and two-bedroom units geared toward a younger crop of older adults who might be used to larger, more roomy residences.
“Our market segment seems to want it all: a kitchen, living room, master bedroom with a king-sized bed and dining space,” Craig told Senior Housing News. “It takes a lot of planning to get all that into an attractive two-bedroom unit.”
Avenida has its own wellness and resident engagement program called Five to Thrive which focuses on life activity, material security, physical and functional fitness, cognitive efficacy, and social resources.
Each community offers a slate of about eight to 10 activities a day, including fitness classes with instructors, classes and seminars, creative arts programs and resident clubs. The communities employ a concierge, who aids residents in scheduling appointments like dog-walking, dry cleaning or food catering.
Avenida also schedules some transportation services and serves a continental breakfast six days a week.