The rise of hipsturbias — first-ring suburbs of metro areas attracting mixed-use development and fostering intergenerational living — was a top real estate trend heading into 2020. these areas have been disrupted by Covid-19, but their future still appears bright, including for senior living development.
Positive demographic trends and a favorable market for housing sales have hipsturbias poised for quick rebounds after Covid-19 fades into the ether, and this will present senior housing developers with even more opportunities to build in these areas. Out-migration from dense urban cores, thanks in part to more flexible work from home policies due to Covid-19, could also benefit hipsturbias.
These were just some of the points raised by PwC Real Estate Practice Leader Byron Carlock and Michael McLean, partner at Condor Partners, during Senior Housing News’ recent BUILD conference, which was held virtually.
Condor is developing a senior living community in the hipsturbia of Evanston, Illinois, and McLean believes that senior housing developments planned in hipsturbias post-pandemic will appeal with first-wave baby boomers who are downsizing from their single family homes and seeking to live in vibrant, intergenerational markets. And independent living’s resiliency during the pandemic will be attractive to younger seniors looking to live active lifestyles longer.
Hipsturbias — a portmanteau of “hipster” and “suburbia” — are proving popular with people who desire the vibrancy of trendy urban neighborhoods in a suburban setting, Carlock said. He cited examples such as Brooklyn, where the trend started in the U.S.
Hipsturbias have spread across the country to markets such as Portland, Oregon and Boulder, Colorado, spurred by creatives such as artists, musicians, and actors unable to afford living in urban cores but still wanting to live near cultural institutions and restaurants. Last year, PwC listed 18 emerging hipsturbias in its annual emerging trends in real estate report.
As more of the creative class enters an area, urban renewal often follows. Warehouses are adapted into apartments, galleries, retail and live music venues. Developers follow suit, building residential housing to meet the demand caused by the influx. This also attracts an older demographic.
“All of a sudden, there’s a dog park in a green space, these communities become more mature and attractive to a larger age demographic, even though they may have been started by hipsters,” Carlock said.
Chicago-based Condor recently topped off Trulee, a $70 million, 163-unit building in Evanston that will primarily be assisted living, with some independent living.
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Trulee is Condor Partners’ second development in Evanston. The first project, a couple blocks south, is a 12-story, 101-unit apartment building adjacent to two commuter rail lines that received national attention at the time for developing a 100-unit apartment tower with no parking spots. The success of that project spurred Condor to seek out more opportunities in Evanston, McLean said.
“I live in Evanston and have seen it evolve over the last 15 years into a more urban [setting] than it had been in the past,” he said.
Initially, Condor set out to build another multifamily building, but its research indicated that there was a need for assisted living in the market. Condor is partnering with Denver-based Solera Senior Living on Trulee, which will operate the building.
Trulee is a case study of a development in the middle of a hipsturbia. Evanston, which borders Chicago’s far North Side, is home to Northwestern University, which provides the suburb with a major component of its identity. Additionally, Evanston shares public transit routes with Chicago, allowing for ease of access to and from Chicago for residents who do not own cars. In fact, McLean estimates that over 5,000 people live in downtown Evanston who are car-less.
“We don’t expect [our residents] to use [vehicles]. Everything that our residents could possibly need is out their front door — including rideshares and public transportation,” he said.
Home sales gain momentum
One factor that bodes well for the future of hipsturbias is an uptick in home sales during the pandemic. Existing home sales increased for the fourth consecutive month in September, according to data from the National Association of Realtors (NAR). The industry association’s data also indicated that home sales median single-family home sales increased 15% over the previous year, total housing inventory decreased to 1.47 million homes, a record low at the current sales pace. And 71% of homes that sold last month were on the market for less than a month. Record low interest rates are contributing to the uptick in sales activity, as buyers with good credit are able to borrow money more cheaply.
McLean is seeing momentum in Evanston’s housing market after years of sluggish activity, particularly with townhome sales — an area where Condor is also looking for development opportunities.
There are concerns that population growth will shift to even less dense areas as positive Covid-19 cases surge across the country, and downtown Evanston’s density is comparable to some of Chicago’s more populous neighborhoods. McLean believes that Trulee will be able to weather this potential storm once it opens, however.
Evanston is on the shores of Lake Michigan and its lakefront runs the entire length of the suburb. Additionally, the city contains several pocket parks and there is more nature than what is normally found in a typical urban environment. Most important, local government has adjusted its Covid-19 mitigation strategies as the pandemic becomes more fluid, allowing businesses to put public spaces to use for dining, shopping and other purposes. This may be a permanent change stemming from Covid-19, after a vaccine is approved for use and widely distributed.
“Our embrace of an outdoor environment is healthier for all of us,” McLean said. “If you have the space to do it — like most hipsturbias will — we should keep them and we’re going to.”
But McLean also emphasized that senior living communities, whether they are located in hipsturbias or elsewhere, also need to appeal to boomer sensibilities and expectations in order to succeed. During a recent run-through of the building, leaders with Condor realized that the promise of safety is no longer sufficient for seniors looking to transition to senior housing; it must be a guarantee.
“We must become fully committed as an industry to providing the safest living environment that we can. But we must go beyond that,” McLean said.
Looking to the future, some of the same dynamics that have led to the rise of hipsturbias are also driving growth in smaller cities around the country, which could also present attractive senior living development opportunities, Carlock said. He cited New Rochelle, New York; Oxford, Mississippi and New Albany, Mississippi; and Wilson, Arkansas as examples.
“We can’t ignore those towns, primarily because the infrastructure already exists,” he said. “The prices are much cheaper for considering new development.”