Hipsturbia: Major Real Estate Trend and Senior Living Opportunity

Hipsturbias are on the rise, and senior living developments are — perhaps surprisingly — taking pride of place in these suburbs that possess a cool factor and are popular with young adults.

A mashup of “hipster” and “suburbia,” the term hipsturbia was first coined by The New York Times in 2013. Priced out of Brooklyn, people in their 20s and 30s were migrating to outlying communities such as Hastings-on-Hudson and turning them into hipster hotspots complete with “locavore restaurants and antler-laden boutiques,” the Times reported

In the ensuing years, these types of communities have sprouted up all over the country — so much so, a recently released PwC report identified hipsturbia as one of the top emerging trends in real estate in 2020.

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Hipsturbias might seem like odd locations for senior living communities. Hipsters themselves — as parodied on shows like Portlandia — are frequently represented as too-cool-for-school millennials or Gen Z’ers who frequent craft breweries, vintage clothing stores and coffee shops specializing in shade-grown beans. 

Older adults might not flock to a skinny jeans emporium, but they are eyeing hipsturbias as attractive places to live for other reasons. Developers and operators are stepping up to meet demand for senior housing in hipsturbia — creating some unique, intergenerational projects in the process. 

The Evanston example

The PwC report name-checked several hipsturbias, including Evanston, Illinois. Located immediately to the north of Chicago, hugging the shore of Lake Michigan, Evanston provides a case study in the alignment of senior living with the hipsturbia trend.

Evanston is an first-ring suburb of a larger city, and like many other hipsturbias is bouncing back from a long period of decline. This is because after World War II, as the population shifted to more distant suburbs where land was cheaper and more plentiful, first-ring suburbs faltered. In the case of Evanston, one blow came in 1956, when Old Orchard shopping center opened in nearby Skokie.

“Over the next couple of decades, there was a long, loud sucking sound as Evanston’s once thriving downtown began to fall on hard times. Its major department stores closed, losing the battle to exurban malls, and corporate headquarters disappeared to cheaper office parks,” journalist T.R. Goldman wrote in a 2015 article for Politico that traced Evanston’s decline and rebirth.

By the 1980s, the situation was dire, with an 18% vacancy rate in the downtown, and the city embarked on an ambitious plan to turn the tide. By changing zoning and parking regulations, and trading on advantages like the presence of Northwestern University and easy access to downtown Chicago via public transportation, Evanston’s leaders hoped to turn the downtown into a “24/7” live/work/play environment.

While it took decades to come to fruition — and met with pushback from critics who argued that denser construction, including mixed-use highrises, would compromise Evanston’s character — the plan succeeded in revitalizing the downtown. 

This success came in part because city leaders were willing to buck conventional wisdom on matters such as parking.

The ability to own a car was long seen as an advantage of suburban living that people would not want to sacrifice, but Evanston wagered that walkability would be a draw and doubled-down on its transit infrastructure, which includes a Metra commuter rail station, a station on the “El” train running into downtown Chicago, and multiple bus lines.

Chicago-based Condor Partners developed the first downtown Evanston apartment building without any parking in 100 years. Centrum Evanston is a 12-story, 101-unit building that opened in 2017 and has been a “great success,” Condor Partner Michael McLean told Senior Housing News.

The success of Evanston’s reinvention strategy is also due to some factors outside the city’s immediate control, McLean said, notably the collapse of the real estate markets during the Great Recession. In Evanston, home values have still barely recovered from pre-recession levels, he noted. People who saw their home equity evaporate — as well as their children — now have a very different perspective on homeownership than previous generations.

“In real estate, we look at the abandonment of the idea of buying a home to create wealth as an absolute and permanent idea,” McLean told SHN. “What [the recession] did is fostered the psychological shift in many young people and many empty nesters that being tied to a home permanently has its cons.”

That psychological shift precipitated a rise in urban multifamily and senior housing development as young people and older adults alike saw more value in easy access to culture and amenities, rather than in owning real estate.

Development in city centers is still ongoing, particularly in the senior housing sector, where three projects are going up in Manhattan alone. But this trend is being dampened by a few factors, including rent increases that in some markets are dramatic. Across the 250 largest U.S. cities, 93% saw apartment rents increase between January 2018 and January 2019, according to Yardi Matrix data cited by RentCafe. In Chicago, rent rose 5% in that time period, outpacing the national average of 3.3%. 

Even as they are seeing their rents go up, millennials living in city centers — including so-called hipsters — are starting to age out of living with roommates, and they are drawn to first-ring suburbs like Evanston, which offer a live/work/play lifestyle that is similar to the one they are used to. This is creating the “depth of the number” of people flocking to hipsturbias, PwC U.S. Real Estate Practice Leader Byron Carlock told SHN.

Yet, Carlock was quick to confirm that aging boomers are also driving the popularity of hipsturbias. 

As Condor’s McLean emphasized, boomers are not as tied to their single-family suburban homes as their parents might have been, and now that they are empty-nesters, they are looking to downsize.

Walkable, highly amenitized communities are appealing to them — and, in fact, it’s reasonable to think that hipsturbias offer a place where multiple generations can live happily in close proximity to each other, McLean and Carlock said.

It’s an idea that Condor is betting on.

While it was still in the process of developing the Centrum apartment building, the firm acquired another parcel of land less than a mile away. Seeing that the Evanston market had become more saturated with multifamily apartments, the firm zeroed in on senior living as an alternative.

With Denver-based Solera as an operating partner, Condor is developing a 163-unit building that will primarily be assisted living, with some independent living. With this mix, the project — dubbed Trulee — will stand out from Evanston’s longstanding senior housing options, notably The Mather life plan community and The Merion, which offers independent living.

Rendering of Trulee project in Evanston, courtesy Condor Partners

At about $70 million, Trulee isn’t meaningfully cheaper from a development perspective than a similar project in Chicago proper, but the location offers several advantages that are hard to find elsewhere, McLean said.

These advantages include nearby hospitals and health centers, the university, transit stations that provide access for workers who live practically anywhere in Chicago, and of course the revitalized downtown. As a hipsturbia, Evanston has its share of vintage shops, but also features a Whole Foods, a public library, a movie theater, an LA Fitness and a host of restaurants.

The Trulee building itself will feature high-end finishes and a cutting-edge contemporary design, said Solera EVP of Strategy and Operations Jerry Taylor.

From both the design and operational standpoint, Trulee will aim for a hip vibe, both to blend into Evanston’s overall aesthetic and to appeal to the next generation of older adults and their adult children, Taylor said.

“Seniors don’t just want to be around seniors,” he said. “Whether in Evanston or other multi-use sites, that’s really important to us.”

McLean concurred about the rich potential for intergenerational programming with Northwestern, and an organic mingling of age groups given Trulee’s location. While Condor is open to pursuing other senior living ventures, he feels that the firm struck gold in Evanston.

“We feel that the location is unbeatable,” he said.

The Santa Clara model

Trulee is slated to open in early 2021, but there are senior living communities that are already operational and making good on the intergenerational promise of hipsturbia. One example is Priya Living’s Civic Center property in Santa Clara, California.

Located west of neighboring San Jose, Santa Clara also was identified as an emerging hipsturbia by PwC. Like Evanston, Santa Clara is a first-ring suburb of a larger metro with a robust transportation infrastructure and nearby universities.

There are major plans underway to make Santa Clara into a top-tier live/work/play destination. In May 2019, New York City-based developer Related Cos. unveiled architectural plans for the first phases of a 9.2 million-square-foot mixed-use site in the city, to include offices, hotels, shopping, dining, residences and other features, including a future skyport for Uber Air

Related Cos. is working with Louisville-based Atria Senior Living on a $3 billion pipeline of urban senior housing developments. Neither Related nor Atria responded to inquiries from SHN about whether senior housing will be part of the Santa Clara development.

Regardless of whether senior housing comes to the Related project, Priya Living shows the potential for successful, intergenerational projects in hipsturbias like Santa Clara.

Priya founder and CEO Arun Paul was working in the luxury hospitality sector when the Great Recession hit, prompting him to take an increased interest in property types that might be more resilient to shocks in the market, he told SHN.

With his own parents as one example, he observed that immigrants are among the largest segments of the aging population — a phenomenon he describes as the “browning of the graying of America.”

In 2013, he founded Priya Living to create communities that would be open to all seniors but geared especially toward Indians in terms of design, programming and cuisine. Santa Clara stood out as a prime location because of what he calls its “ethnic infrastructure” of Indian and South Asian food and clothing stores, community centers and the like.

Priya acquired a multifamily building next door to Santa Clara City Hall and converted it to a 26-unit community for active older adults. However, the building maintained its multifamily zoning, and this ended up being a boon. Attracted to the vibrant design and prime location, young adults began to inquire about moving in, and Paul decided that Priya would welcome them.

A unit in Priya Living’s Civic Center building, courtesy Priya Living

“It was a total accident, not planned,” he told SHN. “What’s been really cool is that there are young people who want to live around elders … who would like to live in a community where their neighbors have wisdom, they’re respectful, thoughtful.”

This openness on the part of young adults dovetails with the stated desire of many older adults to live in intergenerational settings.

The proportion of seniors to younger renters has varied over time at Priya’s Santa Clara building, but the ratio has generally been around 85% to 15%, Paul estimated. This all-ages interest has contributed to the building’s success; today, it is fully occupied.

And while it was not intentional to attract younger residents, Paul is not surprised that they were drawn to the area. He has witnessed first hand the rise of Santa Clara’s hipster cred.

“It’s got diversity, a lot of really cool ethnic restaurants, which I also think is a draw for younger folks or hipsters,” he said. “I live in San Francisco, so you see this cool pour-over coffee shop will open in San Francisco, and then they’ll open another one in Santa Clara or Fremont.”

Paul points to Fremont — north of San Jose — as another hipsturbia, and Priya has two communities there. In total, the portfolio numbers four buildings with another in the works in Southern California. Going forward, the company is looking at about a dozen markets around the United States and is going bigger, with 120- to 150-unit buildings that likely will be traditional, age-restricted senior living. 

However, Paul has taken the lessons of Santa Clara to heart, and is eyeing similar locations near cities such as Seattle, Houston and Washington, D.C. These are places where Paul believes the generations will increasingly mingle, even if they’re not living in the same building.

And if opportunities do arise to create other multigenerational buildings like the one in Santa Clara, he is open.

“We’re pretty interested in it, and if we can keep doing it, it would be cool,” he said.

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