Two Silicon Valley entrepreneurs are working to bring a new model of active adult senior living to the market, featuring a pocket neighborhood design and tech-enabled operations. They developed their concept with advice from senior living veterans, including Sunrise Senior Living Co-Founder Paul Klaasen, and have now secured their first site.
The startup, called Cantina Communities, was founded by A.J. Viola and Zachary Hollander. The pair met through mutual friends in San Francisco, Viola told Senior Housing News. At the time, Hollander was at Google, where he was global head of strategy, insights and business operations, mobile hardware marketing. Viola, a graduate of Harvard Business School, was COO of D-Rev, a company that has launched affordable medical devices. Hollander always had an urge to start his own business, and Viola also was ready to make a change.
“Zach and I got together and and we started talking about, what if we work together, what kind of problem would we want to solve?” Viola said. “If we were to do something, obviously we’d want it to be successful, but we’d want it to be tackling a problem that we both felt was important.”
Based on some personal experiences, Hollander suggested aging services as an area to explore. They are not alone among tech industry professionals eyeing senior housing and care for their next ventures. Another notable example is home care company Honor, founded in 2015 by Seth Sternberg, whose previous venture had been acquired by Google for a reported $100 million. Last year, Reddit Co-Founder Alexis Ohanian predicted disruption to come from entrepreneurs who harness tech to transform senior living in the next decade.
As Viola and Hollander educated themselves about the sector and conducted primary research by talking to older adults, they concluded that there is a cohort of younger seniors open to making a move, but lacking inspiring and affordable options.
Even with the growth of the active adult sector driven by brands such as Overture and Affinity, the pair perceived few choices outside of the “cruise ship on land” model of amenitized congregate living, Hollander told SHN.
Observing the rise of co-working spaces, social clubs and various types of co-housing — as well as the proliferation of tech-enabled gig economy services and new methods of prefabricated/modular construction — their vision came into clearer focus.
As they envision it, the first Cantina community — on the land they have secured near Austin, Texas — would consist of 90 units in small homes arranged in a pocket neighborhood layout across a campus of about 6.5 acres. The homes would have sleek contemporary designs and likely would be built by Ma Modular (see image above). Ma Modular is the modular construction company owned by Chris Krager, Cantina’s development sponsor who also owns vertically integrated develop/design/build firm KRDB.
The campus would also include a 5,000-square-foot great house with an industrial demonstration kitchen, cafe, small market, flexible spaces for dining and events, and a community manager station. Two smaller common houses might include spaces for co-working and other uses.
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The operations would include building maintenance, landscaping, and other similar services, but otherwise take a light touch, relying on resident-driven initiatives and partnerships with nearby businesses and other organizations. The approach is “an unbundling of resort-style living,” Hollander said.
“We don’t think folks want to be paying for the large swimming pool, the kind of halfway-gym/halfway-yoga studio, things that aren’t used that are high cost and done for marketing,” he said.
Rather than have the gym on site, the idea is to partner with fitness centers and yoga studios in the area, ideally offering some sort of discount or other perks for Cantina residents. Food service could be handled similarly, with on-demand delivery services and partnerships with local restaurants.
The duo also are creating a tech platform to support backend operations and facilitate communication between management and residents and among the residents themselves, to support activities such as group dining or social events.
“We call it a digital commons,” Hollander said.
He and Viola calculate that this model should support lower rents than typical active adult, with a junior one-bedroom unit at around $1,600 a month and a full two-bedroom at around $2,600, although those numbers could be subject to change as the project progresses. Still, affordability is a cornerstone of the Cantina value proposition and Hollander and Viola are confident they can beat the rates at competing properties.
Longer term, a big question is how long residents can age in place. There is the potential to support increasing health care needs to some extent in the Cantina model — for example, guest units could be converted into caregiver units, Viola proposed.
He and Hollander believe that care is migrating toward the home, and will continue to do so given consumer preferences, shifts in health care policy and advances in technology, enabling today’s active adult residents to remain in place for significant periods of time — perhaps shaking up the current continuum of housing and care.
“Some people might think it’s provocative, but we think independent living as it exists today will go away or be dramatically reduced,” Hollander said.
Cantina just went under contract for land that used to be an organic farm, located just south of Austin near the community of Buda. The real estate is ideally situated, in that it is walkable to a number of amenities in downtown Buda.
Going forward, these are the types of locations that the Cantina team is scouting for — so-called “hipsturbias,” or mixed-use areas close to larger urban centers, which are drawing millennials looking for more space as they start families while also appealing to older adults downsizing from their suburban homes.
Real estate in the largest U.S. metro markets such as Los Angeles or San Francisco is likely too expensive, but Cantina communities should pencil out near Austin and similar cities such as Portland, Oregon or Albany, New York, Hollander and Viola said.
They estimate the cost for the Austin development to be around $20 million, and they are in the process of raising about $6 million to $7 million in equity. Their goal is to open the community in mid-2021.
Hollander and Viola are sensitive to the fact that they have no previous senior housing experience, and emphasize that they have taken counsel from numerous industry professionals, including Klaasen. But they also believe that their tech industry background gives them some valuable, translatable skills — most notably experience in consumer research and a focus on human-centered design.
“It’s almost shocking how much thought goes into financial engineering of senior housing or real estate in general, and how little thought goes into how people use space,” Viola said. “We start with what a user need is and translate that into an experience that people want, whether that’s mobile hardware or medical devices … we’ve done all of it, and it boils down to the same set of principles.”