SHN+ Report: WelltowerLIVING’s Active Adult and Middle Market Strategy

An Inside Look at How One of Senior Living’s Biggest Players is Making a Foray into the Active Adult Market

With the always-expanding need for middle-market rental options, any new initiative is newsworthy. So in February 2020 when Welltower (NYSE: WELL) announced welltowerLIVING—a new brand providing affordable 55+ active adult rental apartments with rents starting at about $1,000—the market took notice.

WelltowerLIVING promises to “fulfill the unmet need for purpose-built wellness and social-focused private-pay housing that is affordable for moderate-income seniors, many of whom will be Medicare eligible,” according to quotes attributed to Ayesha Menon, Welltower SVP – Strategic Investments, in a press release dated February 2020.

Also in February, the REIT announced a partnership with Danville, Pennsylvania-based integrated health system Geisinger, to begin offering Medicare Advantage services to residents of its middle-market properties. However, the health system (which focuses primarily on Pennsylvania and New Jersey) is not providing services for residents of welltowerLIVING properties at this time, says Matthew Van Stone, a Geisinger media representative.

Welltower declined requests from Senior Housing News aiming to learn more about the company’s welltowerLIVING ambitions and potential market size. However, SHN was able to gather information from online research and conversations with property managers and leasing agents about welltowerLIVING offerings to date.

Launching Active Adult Offerings in Sin City

Welltower entered the active adult market with three properties in Las Vegas — Winterhaven, Valley View, and The Court — comprising 620 total units, including some studio rentals starting at around $750 per month. Those price points are below even Welltower’s initial projections of monthly rentals beginning at $1000.

These numbers make welltowerLIVING’s properties competitive with similar Vegas properties like Radiance at Grand Canyon, where units start at $981 a month, and Destinations Pebble, a Greystar property with rents starting at $783 a month for a 455 sq. ft. studio.

Affordable rents aside, we wondered if Welltower’s Vegas properties were providing authentic social and wellness opportunities for their residents, fulfilling the amenities promised on each property’s website, and starting to integrate senior-focused benefits. After speaking with representatives from each property, as well as several industry sources, it’s clear Welltower is making a genuine effort to serve this active adult niche with the opportunity to scale into new markets.

Defining the Active Adult Model & Underserved Middle Market

The 55+ Active Adult sector is the second stage on a multistage continuum that begins with “conventional multifamily” housing. Typically, “active adult” provides activities/recreation and socialization opportunities in addition to shelter. Such properties do not include commercial kitchens or provide access to meals on a daily basis. Also usually excluded—housekeeping, transportation, and home health assistance.

The market for this type of affordable housing is enormous. “The target demographic for Active Adult apartment communities is the Baby Boomer generation, made up of 73 million people. The average age of residents moving into these communities for the first time is around 70 and nearly 2/3 of them are single women,” according to information shared by Kephart, a Denver-based Residential Architecture and Land Planning Design Firm that participated in SHN’s 3-day July 2020 Active Adult Summit.

“The term ‘55+’ is often used due to local regulations, but in fact it’s rare that a 55-year-old lives in these communities,” says Beth Burnham Mace, chief economist for the National Investment Center for Seniors Housing & Care (NIC).

Overall, the potential active adult market is about 21 million households, estimates Michael Hartman, principal with Washington, D.C.-based Capitol Seniors Housing, a private equity-backed real estate acquisition, development and investment management firm in SHN’s report “The Changing Face of Active Adult Rental.”

The Active Adult Blueprint — How to Make it Work

Welltower’s model and initial rental offerings make sense, says Jamie Timoteo, SVP with Chicago-based Plante Moran Living Forward, which has consulted a number of players in the active adult industry.

“The folks that will be successful will figure out a formula that addresses the number of amenities you offer and how you staff the building, if you staff the building at all,” Timoteo adds. For this type of property to succeed, it should:

  • Have minimal onsite staff, while still being responsive to resident needs (like repairs and maintenance);
  • Focus on suburban and exurban areas, avoiding densely populated urban areas (though Welltower’s communities are fairly close to central Las Vegas);
  • Aim for 120 or more units;
  • Provide a campus with a busy communal space;
  • Avoid cost-prohibitive amenities like housekeeping and a full-service cafeteria.

“It’s just harder to build active adult housing on a small scale,” Timoteo says. “To make it work with fewer units, you have to charge higher rents and that puts you in the price range of independent living, but without as many services and amenities. A development of 20-40 units of brownstone type homes usually won’t work.”

Density is another key consideration, Timoteo says.

So much of success is dependent on the number of units developers can reasonably fit into the space,” he says. “How efficient is the apartment building’s space from a square footage perspective?”

Inside the First WelltowerLIVING Communities

With few vacancies and minimal turnover to date, these communities appear to be thriving, achieving the universal active adult goals to provide fitness/wellness opportunities, games, arts/crafts and social events mostly centered around the pools, patios and clubhouse spaces. The vast majority of amenities listed on the websites are provided, with a few additional services thrown in. Perhaps most important, isolation is minimized; newcomers make friends quickly, facilitated by staff and resident leaders who oversee activities. Pinnacle Living, a national leader in multifamily property management, oversees operations at the three sites.

To date, here’s how the communities are delivering on their new active adult offering, based on our online research and conversations with the properties’ managers/leasing agents.

Valley View

Valley View Senior Apartments, Las Vegas, NV (source: Valley View Website)

With 344 units, by far the largest of the properties, Valley View guarantees 48-hour turnaround on repairs, has both a manager and assistant manager onsite during the week, with a leasing agent on weekends. Clubhouse activities are fairly consistent, if not extensive. They include:

  • Instructor-led chair yoga and chair aerobics classes
  • Bingo twice weekly
  • Board games on Saturday afternoons
  • Billiard competitions on Sundays
  • An instructor-led painting class
  • Seasonal activities like a wreath decorating event and a white elephant gift exchange
Valley View Senior Apartments, Las Vegas, NV (source: Valley View Website)

Both the community’s heated pool and fitness center are open 24/7 and appointments are available in its small hair salon. Valley View’s Teresa Jackson and other leasing agents mentioned additional benefits, including:

  • Medicare-financed free rides to and from medical appointments (for members who qualify), and
  • A recent food box giveaway provided by a local nonprofit
Source: information gathered from property websites in December 2020


Winterhaven Senior Apartments, Las Vegas, NV (source: Winterhaven Senior Apartments Website)

The only one of the three communities without a gym, Winterhaven is the smallest of the developments with just over 100 units. Occupancy is high, with only two units available in mid-December, according to Winterhaven’s leasing agent, Levi Prody. Amenities include a a resort-style pool, social events, a resident clubhouse with WiFi and a popular outdoor grill area.

A DIY approach is essential to the success of these communities. At Winterhaven, resident-led clubs and events continued to thrive on a limited (socially distant) basis during the COVID-19 pandemic, Trody says. Most clubs at all three communities are led by unpaid resident Community Ambassadors and planned in advance on each community’s monthly social calendar. Winterhaven also offers a few benefits not included on its website, including:

  • Shipt. “A service providing free grocery delivery on orders over $35” (free for the first year).
  • A free shuttle service, which provides transport to shopping, physician appointments, etc. (The service was temporarily on hiatus due to COVID-based security measures.)
Winterhaven Senior Apartments, Las Vegas, NV (source: Winterhaven Senior Apartments Website)

An intangible benefit that Winterhaven boasts is a sense of community. “Vegas isn’t known for feeling homey,” Prody says. “Here, it’s the other way. Everyone watches out for each other. I had a lady move in last week and she knows everybody’s name already.”

Source: information gathered from property websites in December 2020

Court Senior Apartments

Court Senior Apartments, Las Vegas, NV (source: Court Senior Apartments Website)

With four elevator accessible buildings (180 units total), Court Senior Apartments are located within a 15-minute drive of the Las Vegas Strip, and within only a few blocks of Smith’s, Sam’s Club and other big-box retailers. Qualifying residents must earn 2.5 times their rent, with rents starting at about $936 for a one-bedroom unit. As with all the properties, small pets are allowed and the minimum age is 55, though a small (10%) percentage of roommates can be 45 or older, says Assistant Manager Bo Santos.

A community garden described on the website seems to be inactive, and some activities were suspended due to the pandemic. The Court also features a pool, gym, chair aerobics in the clubhouse, seasonal water aerobics and free transportation provided by the Regional Transportation Commission.

Court Senior Apartments, Las Vegas, NV (source: Court Senior Apartments Website)

The Court offers monthly field trips, occasional entertainment in the clubhouse (“a DJ who also sings”), and daily continental breakfast. Bingo and a resident-led “Crochet Club” continue, Santos adds.

Source: information gathered from property websites in December 2020

Active Adult Community and Connection

Gyms and pools are common amenities (Welltower’s Vegas properties offer one or both), but perhaps the most important elements of a successful active adult property are a communal space/clubhouse adaptable for yoga and other exercise classes, card groups, lectures, arts/crafts classes, group gatherings, dancing, and other group activities.

While all of welltowerLIVING’s properties offer instructor-led exercise classes, residents take leadership roles in organizing social events, communal meals, and outings, which Plante Moran’s Timoteo believes is essential for these developments to thrive. He adds that the budget simply isn’t there to have most activities run by staff. Owners can facilitate this process by having outside groups come in to train residents on best practices for creating these activities.

Source: WelltowerLIVING property websites

Welltower’s First Step — Proof of Concept

The senior housing industry has been wringing its hands over the underserved middle-market for years. Based on his experience and analysis, Timoteo believes the industry is finally making its move and, if one of the largest REITs can make this work, others will follow.

Welltower’s entrance into the market is important but others are much further along, proving the model and making significant investments into the active adult sector.

Greystar, for example, already has a lead in this market. The Charleston, SC-based firm with more than $32 billion in assets under management provides development and construction services; investment management services, and property management services across much of the U.S. Since 2016, Greystar has launched the active adult brands Overture and Everleigh, and, in 2020, introduced Album, a more affordable active adult brand, developed in partnership with The Carlyle Group. Late in 2020, Greystar’s website reported 44 active adult communities (8,600 units) under management, totaling $2.6 billion in active adult assets.

In the case of welltowerLIVING, the company’s Las Vegas properties are definitely hitting the $1000-a-month target, making rental housing more accessible to the lower end of the middle-market spectrum. This is an innovative departure for a firm previously known for partnerships with higher-end operators and one that shows Welltower’s understanding that affordable active adult rentals are an untapped growth sector.

Timoteo believes this price point is even addressing the lower end of the active adult segment.

“Folks earning in the $25,000 to $35,000 range can afford this option,” he said. “So they’re definitely serving that middle-market clientele.”

In addition to launching welltowerLIVING, over the past few years the REIT has brought middle-market independent living company Clover Management under its umbrella in a $343 million joint venture transaction and has launched partnerships with two other companies in the 55+ space: Charlotte, North Carolina-based Terwilliger Pappas, and San Francisco-based Priya Living.

With enormous opportunities in this sector, the question at this stage is not whether Welltower will continue expanding into the active adult market, but which path it will choose. Together, the relative success and failure of these ventures should help the REIT decide whether it’s better to expand its 55+ holdings through welltowerLIVING, new partnerships, or a combination of both.

A Growing Market With Room for More

Through most of 2020, COVID-19 made the industry jumpy.

“Most interesting, investors are gravitating back to the more need driven or traditional seniors housing component, after the emergence of active adult,” essentially returning to their comfort zone, according to CBRE’s 2020 investor survey.

However, this COVID interruption is likely more a speed bump than a dead end for development of the affordable active adult sector; both the short- and long-term markets for this type of product are too large to ignore.

That’s why investor curiosity is finally turning into action. “The interest level from investors has ramped up in the last 2-3 years and a perfect example is Welltower. They’re one of the biggest players among the REITs. The fact that they’re investing says a lot,” Timoteo says.

“My view is that this sector will continue to grow. It’s the perfect sweet spot for the aging baby boomers. Active adult caters to this cohort,” adds NIC’s Mace.

Written by Andrew Smith

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