Spurred on by recent success, the nation’s largest operator of active adult communities is gearing up for even more growth and evolution in the sector.
The Charleston, South Carolina-based multifamily and senior housing operator, developer and builder is already sizable with 110 communities owned or operated in 28 states and 90 markets. And that is not to mention the fact that Greystar is the largest operator of multifamily apartments in the U.S.
But Greystar is planning to expand beyond that and grow in the active adult sector “significantly” in 2024, according to Michael Levine, senior managing director of real estate, active adult.
“We have pieces in place to grow a lot more, and to be able to handle a lot more without faltering at all,” Levine told Senior Housing News. “Potentially, we are looking at moving into three to four more states in 2024.”
Underpinning the company’s rapid growth is the fact that its communities have not crept up in average age as some in the industry, Levine included, once feared. Instead, the average age at Greystar’s communities has actually ticked down in recent years, representing an age group that is significantly younger than what most traditional senior living communities are seeing in 2023.
The company’s communities span three in-house brands — Overture and Everleigh for the high-end, Album for the middle-market — and a host of local brands managed for other parties. And Levine said the secret to achieving such a low average age is creating communities that are focused on fun. Having no in-house meal component is also an important differentiator, he said.
“To me, ‘active’ is not just that someone is physically exerting themselves or is able to do something,” Levine said. “It’s mind, body and soul. And that’s really what we’re focused on.”
Creating active communities
Part of Greystar’s growth philosophy is that many older adults are in search of active adult dwellings that match the kind of lifestyle they want to live. For incoming baby boomers, that seems to be a sense of vibrancy and fun and not necessarily that their clinical care needs will be met.
Although Greystar’s offerings differ from one brand and community to another, all of the company’s communities are meant to stand apart from the wider senior living industry and its offerings. A typical new Greystar community comes equipped with flexible spaces for gatherings such as clubhouses and common areas, units with balconies and modern layouts, and plenty of space for exercise and outdoor activities.
But the company also puts lots of time and effort into researching local markets to determine what it is residents will want there.
“Our goal is to be aspirational, meaning … people at retirement age who are looking for their next steps in life,” Levine said. “Our amenity packages vary quite differently based on different regions or states.”
Overture Tributary in Birmingham, Alabama; photo courtesy GreystarGreystar does not offer staff-intensive services like in-house meals or care, and the company is able to employ only six or seven staffers in a typical 165-unit community, keeping overhead costs low.
Staffing is generally an area where other active adult companies go wrong, often because the community is offering some kind of in-house meals, he said. Levine also said he sees other active adult operators with too-small units.
“People are looking for larger units because they’re moving from a four- or five-bedroom house and they’re downsizing,” he added.
Wielding that strategy, Greystar has been able to achieve average lease renewal rates among residents of about 75%, with an average length of stay for most residents of about three to five years.
Notably, the company also has achieved an average resident age of just shy of 72 years old, a decrease from an average age of 74 years almost six years ago.
Levine has years of senior living know-how under his belt. Before joining Greystar in 2017, he worked with Chelsea Senior Living in multiple roles; and before that, he was a regional manager for Sunrise Senior Living.
One common fear among more traditional senior living operators is that active adult communities risk so-called “acuity creep” as residents age in place. In fact, Levine said that was also his “biggest fear” as recently as six years ago.
Drawing upon his past experience in independent living, Levine said he believes that one crucial difference with Greystar is that the company generally does not bring in ancillary service partners to help residents age in place. That differs somewhat from other active adult companies that are growing platforms centered on pairing active adult dwellings with health care services.
“While we want people to age in place — and some people bring in a caregiver or bring in extra help — the reality is that we are a specific type of environment,” Levine said.
Levine sees other companies spinning up active adult platforms, including many in the more traditional senior living world. But he cautioned that active adult requires its own specific focus, and that it is a truly different product type than both senior living and multifamily. That means any active adult platform needs a dedicated and experienced team overseeing it.
“I think active adult needs to stand true to what its name is, and there will be different variations,” he said. “But ultimately, it’s not just age-restricted living.”
Growth explosion incoming
Greystar is planning to keep up its pace of growth in 2024, which “has not slowed down at all” in recent years amid development and construction challenges, according to Levine.
The company is moving ahead both in developing and building owned communities and working with developers on third-party management projects. One such example is Headwaters Group’s plan to develop middle-market active adult communities with Greystar slated to manage them. Overall, about 40% of the company’s communities are under third-party leases, Levine said.
Although site selection has become more challenging this year, Greystar’s development teams across the country are still able to find viable deals with which to move forward on.
As Levine alluded, the company has its eye on expanding into new states, particularly in the Midwest, including Missouri and Indiana. Beyond that, Greystar is also looking to further expand in the Pacific Northwest and Northeast, where it already has a presence, with three new locations set to break ground in 2024.
Aiding Greystar in its growth plans is the fact that it is tied into a larger corporate “mothership” and its extensive resources in IT, legal and development. The larger company also is innovating in ways that may benefit active adult down the road, such as by ramping up modular construction techniques.
“I don’t think [modular construction] is in any of our next builds, but … for our following generation, that’s something we’re looking into,” Levine added.
In the last 12 months, Greystar has gained some new competitors in the active adult sector as it remains red-hot for new entrants, and Levine said he is aware of many more projects being underwritten or sites being locked in for future active adult development.
“We are starting to see that that market is about to explode,” he said.
But given Greystar’s scale and sophistication compared to other companies, Levine believes it will remain a top player in the active adult space — and likely become an even bigger one.
“We will have some significant expansion over the next 12 to 18 months,” he said.
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