Related Cos. and Atria Senior Living have been tight-lipped about plans for their $3 billion development pipeline, so I was excited when NY YIMBY recently published renderings of the project underway in New York City.
I reached out to the architecture firm that is involved, Handel, in hopes of learning more about the design concept, but a spokesman told me that YIMBY revealed the plans before they were intended to go public. Neither Handel nor Atria offered any additional comment.
So, as has largely been the case with these Related/Atria projects, we have some tantalizing clues about what is to come, but not much concrete information.
The companies do seem to be making steady progress on their stated goal of bringing luxury senior living to urban centers — and there are hints that they might be able to accomplish even more than that by targeting smaller markets and different price points.
A glimpse of The Set
When it was first announced in 2018, the collaboration between Atria and Related raised the possibility of a senior living community in Hudson Yards, Related’s massive development on the west side of Manhattan.
Hudson Yards has been controversial for several reasons, including Related’s use of the EB-5 program, but Related also positioned the development as a template for the mixed-use community of the future: a blend of retail, restaurants, residences, offices and co-working space, outdoor gathering places and art exhibits, and distinctive architecture combined with innovative offerings like a members-only medical clinic for residents and CAMP, a toy store/day camp for kids.
Having a senior living community in the mix would carry symbolic weight, as perhaps the most striking indication yet that older adults no longer will be put out to pasture in sprawling, isolated communities on the edge of town. Rather, they will increasingly live in an integrated way among people of all generations, with rich opportunities for commerce and culture at their doorstep.
At first, it seemed unlikely that senior living would find a place in Hudson Yards; plans for the development were already “well baked,” Atria CEO John Moore observed at our BUILD event in 2019.
But just a few months later came the news that Related planned to include senior living in a highrise to be built at 451 10th Avenue, right on the edge of Hudson Yards. The renderings published this week show that — like the Vessel, Edge and other Hudson Yards structures — the new 10th Avenue highrise will be given a one-word nickname: The Set.
The renderings also show senior living floors nestled between retail and restaurants on the ground level and market-rate residential units on the upper levels. Perhaps most intriguing, the renderings show an Equinox fitness club in the building. Related owns Equinox, and the synergies between Equinox and senior living are palpable.
For instance, the webpage for the E by Equinox membership program looks like a sexier version of a senior living community website, touting “high performance living,” nutritious and delicious dining options, and even a “continuum of care” that connects members with physical therapists and a surgery center.
It’s easy to envision a package of these services specifically designed for senior living residents at The Set, and they would simply have to take the elevator downstairs to access the Equinox facility. Or perhaps Equinox would be involved in the “senior living wellness” level that is depicted in the renderings. I think it’s even plausible that these Atria/Related communities might leverage the power of the Equinox brand. “Equinox Living” certainly sounds like it would appeal to a boomer demographic — and would be even more tantalizing to their adult children.
An Equinox connection is all speculation, of course, but the Set — a name that conjures tennis scoring — would be an appropriate venue for Atria to bring fitness and wellness to a new level in senior living. For years, tennis legend Billie Jean King has been Atria’s well-being coach and a public face for the company.
Smaller markets, lower price points
The NYC project is exactly what Related and Atria originally said they would deliver: luxe senior living in a mixed-use setting in the heart of a major metropolis. Another project in this vein recently topped out in San Francisco’s Cathedral Hill neighborhood.
But Covid-19 has raised some questions about the future of dense, urban living.
Hudson Yards has lost some mojo due to Covid-19, with Daily Mail photographs showing “desolate parks, shuttered offices, and empty shops” as of September. No doubt activity will pick up again once the pandemic wanes, but Hudson Yards will have to recover from setbacks like the loss of core retail tenant Neiman Marcus.
And, Covid-19 led to outmigration from the largest U.S. cities like New York. The Big Apple lost about 3.6 million people and sustained $34 million in lost income in 2020, according to a recent analysis.
Because of this outmigration, markets that are close to large cities but offer a high quality of life at a lower price point have gotten hotter. The Related/Atria JV is targeting one of these smaller markets: New Rochelle, New York. And even before Covid-19, the JV was making moves in a smaller California city famous as a tech hub: Cupertino.
In Cupertino, Related has partnered with KT Urban to develop 88 townhomes, 206 senior living units operated by Atria, and a 20,000-square-foot retail component.
Most interesting to me, 20% of the senior apartments will be affordable housing. When I spoke with KT Urban Partner Shawn Milligan last May, he pointed out that Related began as an affordable housing developer. Today, the company owns and manages 55,000 affordable and workforce housing apartment homes.
I don’t expect that future Atria/Related projects will include affordable components unless there are attached incentives like the ones they got in Cupertino, such as flexibility on building heights. However, it’s worth noting that Related is active in the affordable senior housing sector more broadly — for example, the firm’s JV with St. Mary Development Corp. recently landed $38 million to renovate a 230-unit affordable senior housing community in downtown Dayton, Ohio.
Furthermore, Atria is venturing into middle-market senior housing with the launch of its Gladwell brand. And, Welltower (NYSE: WELL) is a financing partner for the Related/Atria projects in NYC and San Francisco. The REIT is building a middle-market portfolio with its WelltowerLIVING communities and operating partners such as Clover.
So, while Atria and Related came out of the gate saying that their pipeline would create “luxurious” senior living in “major cities” such as NYC, San Francisco, Boston, L.A. and Miami, I would not be surprised if — at least in the near-term — we see more projects from them in smaller metros.
And while I anticipate that their immediate focus will remain on a high-end product, Related, Atria and Welltower are interested in other price points. Should they decide to collaborate on a more affordable offering, their combined capital and expertise could move the needle on middle-market senior living in a major way.