Fast-growing Sparrow Partners is expanding its middle-income active adult model across the U.S. — and looking ahead, the company has its eyes on markets on both coasts.
The Austin, Texas-based active adult operator and developer has 10 operating communities and 17 others under development in Arizona, Florida, Nevada, Oklahoma and Texas, with 13 of those projects now under construction, according to Luke Bourlon, co-founder and president of development with Sparrow.
Earlier this month, Sparrow closed on a purchase of a 151-unit active adult apartment community in Austin, Texas. The community — formerly ArborView of Cadence Multi-Family –is located within a master-planned community in southwest Austin.
Sparrow has in the past identified suburban markets as prime opportunities to build scale and meet demand for middle-income active adult communities. And looking ahead, the company’s plan is to continue to grow in those areas — mainly in the Sunbelt region, Bourlon noted.
“Our plan is to … stamp our flag like we’ve done in the Phoenix market and have an evergreen presence where we can keep a lot of our same teams healthy and thriving and going from project to project,” Bourlon told Senior Housing News. “Both on the construction side but also among our regional managers on the management side.”
The company’s communities typically carry rates between approximately $1,400 to $2,500 per month.
Sparrow is growing in some markets with partners including Welltower (NYSE: WELL). The two companies are collaborating on three projects in Texas slated to be rolled into the Amberlin brand umbrella.
Projects in that pipeline include 193-unit Amberlin at The Station, a community in a mixed-use development in the Dallas suburb of Sachse, Texas; and the 195-unit Amberlin Pflugerville community set to open in the Austin suburb of Pflugerville.
Outside of Texas, Sparrow is also working with Welltower on new projects in Glendale and Phoenix, Arizona; and in Tampa and Naples, Florida. Welltower initially forged its partnership with Sparrow in 2021. The Toledo, Ohio-based real estate investment trust (REIT) is also working with Treplus Communities, another active adult company.
In Addition to Welltower, Sparrow is partnering with private equity firm The Carlyle Group. Carlyle teamed up with Sparrow on the launch of its Phoenix-area portfolio and the two are currently in the pre-development phase of their eighth project together and the fifth in the Pheonix market.
Separately, Sparrow also plans to expand its footprint into two new states in the coming months, California and Georgia.
In each project, the company is tailoring each community’s amenities, floor plans and programming to what residents in that community want. To determine what that is, the company is surveying residents who currently live in its communities as well as asking onsite employees for guidance.
“It’s in our Sparrow’s DNA and culture to bring a lot of curiosity and humility to the table and try to learn and get better with each project,” Bourlon said.
Sparrow is not the only senior living company optimistic about the future of the active adult sector. Investors have identified the product type as a good target for new investments, with 34% identifying it as the best opportunity for investments in 2022 in a recent CBRE survey.