Greystar Real Estate Partners has become one of the foremost names in the fast-growing active adult rental sector in recent years, and now the development and management company is expanding in new directions with the launch of its more moderately priced Album brand.
Charleston, South Carolina-based Greystar is the largest U.S. operator of multifamily apartments and has more than $15 billion of assets under development. About four years ago, the company entered the active adult space with its Overture brand and rapidly grew that portfolio in a joint venture with private equity giant The Carlyle Group. Greystar subsequently launched a second active adult brand, Everleigh, with other capital partners. Today, Greystar has 43 active adult communities open and operational across the United States.
“Based on the experience that we’ve had over the years, we decided that it was opportune to bring a new brand to market that really focused specifically on the middle-market customer,” Greystar’s Senior Director, Active Adult Marketing Robin Craig told Senior Housing News.
Going forward, Greystar is interested in leveraging its scale and expertise in various real estate segments to create clusters of communities that serve different types of consumers in terms of age, needs and price point.
This strategy could include creating active adult strongholds in particular metro areas by bringing its different brands to those markets; creating intergenerational living by mixing active adult with multifamily buildings or even student housing; as well as creating continuum-of-care models by partnering with experienced senior living operators, Greystar Senior Managing Director Mitch Brown told SHN. Greystar recently made its first foray into assisted living through a joint venture with Houston-based developer and operator Belmont Village.
Greystar is creating a middle-market offering in part due to knowledge accrued as the Overture and Everleigh brands gained scale. About a dozen of the company’s operational active adult communities were acquisitions. All of these buildings are doing well, with average occupancy around 93%, and several are a more middle-market product than what Greystar typically has been developing from the ground up, Brown told SHN. In particular, he singled out four communities in Las Vegas that served as test beds for a more moderately priced active adult model.
In addition, Greystar has conducted “very detailed” psychographic research over the last three years, in an effort to better understand the rental active adult consumer. What emerged is that this is a diverse mix of people, including a significant number of 55- to 74-year-olds who are “very interested in this lifestyle” and have annual incomes in the $50,000 to $100,000 range, according to Brown. And these findings dovetail with other recent research showing massive impending demand for middle-market senior housing across various care levels.
“We know that this is the largest group in the boomer population,” Craig said.
Lower-acuity types of senior housing — such as active adult and independent living — have been a natural starting point for creating more middle-market options, as lighter staffing requirements make it easier to create financially feasible models at more affordable monthly rental rates. Still, careful consideration must be given to all elements of a project in order to keep costs in check.
Greystar will debut its model with Album Keller Ranch, a 180-apartment community developed in partnership with Carlyle Group in Fort Worth, Texas. Like Overture and Everleigh buildings, Album Keller Ranch will be highly amenitized, including a clubhouse, heated pool, outdoor lounge and kitchen, dog park, walking paths, community garden, fitness center and yoga studio. One- and two-bedroom residential units will feature high-quality finishes such as granite countertops and subway tile backsplashes.
However, there will be differences between Album buildings versus Overture or Everleigh buildings, in order to support rental rates that are about 25% lower, Craig said. For example, the size of amenity spaces such as the clubhouse will be smaller in Album properties, and surface parking will often replace structured parking.
Site selection is another crucial consideration. Having a more geometrically regular plot is important in keeping costs down, and Album communities generally will be built in less dense and more suburban locations, Brown said. Still, walkability is important. Album Keller Ranch is will be part of a mixed-use community being developed by Greystar, which is also slated to include retail shops and a garden style apartment community.
While active adult communities are staffed more lightly than higher-acuity types of senior housing, having the right support team in place is also essential to creating a successful project. Greystar typically employs a lifestyle coordinator, which Brown describes as a “crucial role” in cultivating the type of experience that active adult renters desire. Album buildings will have a leaner staffing model, but Greystar is still hiring people with the same “aptitude and attitude” that the company looks for in all its lifestyle coordinators and other active adult staff.
But while Album’s service package might be lighter than Overture’s or Everleigh’s, Greystar has a playbook to ensure consistency and a high level of execution across the new brand, Craig emphasized. And she believes that consumers for Album may skew younger, will embrace the new model and be proactive in creating the lifestyles they desire.
“It still represents the Greystar standard of quality,” she said of Album.
Synergies across the continuum
Interest in Album Keller Ranch has been promising, with Greystar establishing a database of more than 100 potential leads within just a few weeks of beginning to advertise the property, Craig said. Move-ins are expected to begin in spring 2021.
Certainly, Greystar expects robust demand for the Album offering, if expansion plans are any indication. The company is continuing to add new Overture and Everleigh properties, with about half a dozen scheduled to open in the next year, Brown said. But, the Album portfolio will grow probably twice as fast compared to the other brands in the coming years, as there are more sites that are suitable for Album buildings. Also, the economic effects of the Covid-19 pandemic likely will only strengthen middle-market demand.
Markets being eyed for future Album developments include Atlanta; Raleigh and Charlotte in North Carolina; and Denver. Greystar is also interested in creating more Album communities in the Dallas/Fort Worth area. Being able to achieve scale within a given geographic area is one benefit of having multiple active adult brands, Brown said.
“We can have different products for different segments within the large metro areas,” he said.
In addition to creating a concentration of active adult properties in a given market, Greystar is interested in pairing Album, Overture and Everleigh communities with other types of real estate that the company develops. Co-locating active adult with multifamily apartments is one natural step.
“We see that as great for intergenerational living, where the kids might live in the multifamily and the parents might live in Album,” Craig said.
With the trend toward intergenerational living in mind, Greystar’s active adult team is working with the company’s student housing arm on projects to co-locate the two types of buildings, Brown noted.
He also is a “huge proponent” of building active adult in close proximity to other types of senior housing, such as independent living, assisted living and memory care. He flagged the work of groups such as Engel Burman on Long Island as good examples of this strategy. And now, with the Belmont Village JV underway in San Diego, Greystar has taken its first steps into developing higher-acuity senior living.
“I’ve always believed in the continuum concept,” Brown said, citing his professional background. For about two decades, he was chief development officer for Kisco Senior Living.
And, he is not the only member of Greystar’s active adult team with expertise in higher-acuity senior living. Brett Robinson, managing director for sales, previously held leadership positions with Clearwater Living and Leisure Care. And Michael Levine, managing director for operations, formerly was VP of sales and marketing for Chelsea Senior Living.
Having senior living experience is beneficial when it comes to developing and operating active adult communities, Brown said. The sales and marketing process, for example, is much more similar to senior living than to multifamily apartments. And even though about 35% of active adult residents still work full-time or part-time, the balance do not; therefore, it is imperative to create a strong sense of community within a property.
“The senior living people coming in, they look at it and say, ‘How hard can it be to run a building with six full-time employees?’ I can tell you, it was hard,” Brown said. “You have to change so many different ways of doing things.”
He and his colleagues have a long list of lessons they have learned since first starting to create Overture buildings, Brown said, including the importance of having flexible common spaces and making sure building services and amenities can adapt as residents’ needs change. Indeed, one “big takeaway” has been that — despite being renters — active adult residents consider these communities their home and feel a sense of permanence.
“They don’t look at this as a transient lifestyle,” he said.
He argues that Greystar has benefited from the “symbiosis” of multifamily and senior living prowess, and now has a competitive edge thanks to the learning curve that came with being a pioneer in active adult rental communities. While the team might have made different decisions about where to build some of Greystar’s first active adult communities, he said that these “Overture 1.0” buildings are beautiful properties in prime locations and are “all coming together now.” And he has pointed advice for the growing ranks of people from both the multifamily and senior living industries who are eyeing the active adult opportunity:
“Don’t take for granted what you think your customer values.”