What is an Active Adult: Developers Must Gain Clarity on Consumer Profiles

Recently, Sara Kyle came across an image of a new 55-plus active adult community in Florida, and it piqued her interest.

Specifically, Kyle — former director of resident experience for Holiday Retirement and founder and principal at LE3 Solutions, a firm specializing in senior living wellbeing programs — wanted to know more about the consumer being targeted by the image.

Kyle shared the image with her mother, who still lives alone and independently, to get her thoughts. Her mother pointed out a lack of communal space and was not impressed with amenities such as a swimming pool.

“She saw the design as nice, but it didn’t have functionality to keep her independent,” Kyle told Senior Housing News.

Her mother’s reaction fed into Kyle’s belief that developers and investors in the growing active adult rental segment should pay closer attention to the age range and characteristics of seniors moving to these communities, a sentiment shared by other experts on aging.

That is primarily because, while active adult buildings are restricted to people 55 and older, their actual censuses trend around 20 years older, with no signs of decreasing as more baby boomers seek to live independently for longer periods until a move to senior living is needed.

Active adult operators interviewed by SHN for this story revealed that seniors in their mid-70s to mid-80s account for the majority of residents in their buildings.

But investors and developers may be approaching the generation as a one-size-fits-all group, rather than the fluid and diverse cohort that it is.

Because active adult rental communities are still a relatively new product type, it is possible that the model will be refined as more is learned about who is attracted to the product, Avenida Partners Founder and Managing Partner Robert May told SHN.

“It’s a very diverse population, with different interests. Each of us who are developers needs to pick the niche within that population,” he said.

Not a monolith

The Housing for Olders Persons Act of 1995 (HOPA) grants developers the right to restrict housing if they operate it as a “55 and over” community. But age is not the overriding factor behind seniors’ decisions to move to an active adult community, and Kyle is not alone in questioning who active adult rental communities are being designed for and marketed to.

Joseph Coughlin, director of the Massachusetts Institute of Technology AgeLab, published an article in April on LinkedIn, arguing that investors view boomers as a monolithic group — and arguing that the so-called “active adult” might not even exist.

“Despite their compelling numbers, are younger Baby Boomers and older Gen X’ers a story of more consumers in search of active adult living as we know it today, or a myth comparable to chasing unicorns?” he wrote. “There is a general consensus on what a unicorn looks like, less so for what is an active adult.”

In his post, Coughlin posits that investors and analysts may be compelled by the sheer numbers of boomers expected to retire over the next 20 years, but they are not giving serious consideration as to what they want to see in a retirement community, and instead are casting a wide net. He is skeptical as to whether younger boomers and older Gen Xers want to live in today’s active adult communities.

Active adult developers, meanwhile, insist they are taking a long-term view of the product, and predict that it will adapt to the consumer as more is learned about who is flocking to it.

Active adult communities today are essentially independent living light, said Frankie Pane, president and CEO of Essex Communities. The Omaha, Nebraska-based owner and operator’s portfolio includes 12 communities in six states, with two more under development, and it specializes in rental active adult, allowing the company to tap into demand for middle-market senior housing.

Pane calls the term “active adult” a marketing buzzword, and Essex does not use the term in its sales and marketing strategy or materials. The company uses “active 55-plus living” to define its communities to prospective tenants.

“For the consumer, it needs to be better defined, eventually,” he said.

That definition may depend on whether these communities primarily serve older or younger baby boomers.

Older boomers born in the mid-1940s to early 1950s are likely to have more in common with the youngest wave of the silent generation, while the youngest boomers born in the early 1960s are more likely to share interests with the oldest segment of Generation X, Coughlin argued.

These differences in formative experiences extend to education, employment history and how they socialize. As a result, an older boomer’s perspective of what retirement looks like may differ from that of a younger boomer. Younger boomers may still want to work, even after downsizing their home environments.

Moreover, the ways in which boomers socialize differ between the cohorts. Older boomers may frequent church more often, or be members of civic organizations and clubs such as Rotary, Lions and Kiwanis.

But membership among these organizations is on the decline. Membership in faith-based organizations, in particular, fell to 47% — the first time it has fallen below 50% in the U.S. and a 23% decrease from 1999.

A bell curve

As companies like Avenida and Essex build out active adult portfolios, more evidence is emerging as to who the consumer is.

Although HOPA allows developers to develop and operate age-restricted communities, people in their mid-50s are not flocking to them. In fact, seniors in their mid-70s appear to be the target demographic for active adult communities.

The average age of an Avenida resident is 74, 65% of its total resident population are between ages 74 and 84, and less than 9% of is under age 65, May told SHN.

Avenida is more focused on attracting tenants that will stay at a building for an extended period, and develops relationships with market experts including other senior housing providers to identify prospective tenants who will be ideally suited to live at an Avenida property, versus those that will need higher acuity care. It also allows the provider to weed out renters who still want to live independently, but in a multigenerational or intergenerational setting.

A deeper look into Avenida’s resident population reveals other trends. Approximately 70% of the provider’s total resident population are single or divorced women, or widows. Married couples account for 25% of Avenida’s resident population.

This creates opportunities to develop new friendships that can positively impact lengths of stay.

“It’s a very organic, fluid situation that ultimately ends up being resident driven,” he said.

The average age of residents at Essex’s buildings is even older: 78 at move-in, and 80 upon stabilization of a community, Pane said.

As with Avenida, he estimates that less than 5% of Essex’s total resident population is younger than 65, and an equal percentage is over 90. And the company works with local groups, including senior centers, when entering new markets to identify key stakeholders who serve as advocates and help identify demand.

“The meat and potatoes of our census is in that mid-70% to mid-80% range,” he said.

At Inspire Coastal Grand, a newly opened 55-and-over active adult community in Myrtle Beach, South Carolina operated by Liberty Senior Living, the average resident age is 71, Regional Director Christy Chestnut told SHN. This is the first active adult community for the company and marks the launch of a new brand for the Wilmington, North Carolina-based operator.

The age range at Inspire Coastal Grand varies, with residents as young as 58 and as old as 92, but they share a common trait: most of the residents that have relocated to the community lived within a five- to seven-mile radius, and are seeking a transition from their previous home environments. Some want Inspire Coastal Grand to be their final home, while others recognize they may need to move into assisted living at a later date.

Neither May nor Pane see the average age of active adult renters changing significantly anytime soon. Younger seniors want to live independently for as long as they can, and many will likely entertain a move to senior housing when it becomes necessary, and make the move with several co-morbidities in place that need monitoring from clinicians to slow the rate of decline.

As long as they stay active on their own, they will not entertain moving to age-restricted communities at a younger age. Kyle’s mother still maintains an active and rewarding lifestyle, without a congregate setting.

“Until you stop being busy, you don’t think you need congregate living,” Kyle said.

She believes active adult players need to do a better job of separating the boomer generation into the distinct cohorts that they are. Otherwise, current development strategies will continue to dictate where and how active adult development happens.

“There has to be a really compelling story to get them to move,” she said. “It’s not the dwelling; it’s the experience they’re going to have.”