PHILADELPHIA — Andrew Carle believes that university retirement communities (URCs) represent a potential game-changing opportunity not only for the seniors housing industry but also for universities and retirees, if executed properly.
Yet, URCs are also extraordinarily complicated to operate, cautions the founder of UniversityRetirementCommunities.com, the first directory and information resource of its kind, which lists more than 85 such communities nationwide.
“It doesn’t get more difficult than trying to merge big, large, bureaucratic state universities that move very slowly and who live in a bubble of 20-year-olds with the senior living industry that’s very fast-paced, investor-oriented and focused on 80-year-olds. If you had to think of an odd couple, that would be it,” said Carle, an adjunct faculty member at Georgetown University and president of Carle Consulting. His comments came at the InterFace Seniors Housing Northeast conference on Dec. 5. at the Live! Casino & Hotel Philadelphia, where he was the keynote speaker.
Up until the last 15 years, there were only a handful of URCs nationwide, but today it’s among the fastest growing segments in the senior living industry, said Carle.
While the vast majority of URCs are loosely connected to institutions of higher learning, the top dozen or so are well integrated, he said. Among the major schools currently hosting a URC are the University of Alabama, University of Arizona, Duke University, University of Michigan, University of Notre Dame, Penn State, University of Texas, University of Virginia, and the University of California, Los Angeles.
Driving factors
One of every five Americans will be age 65 or older by 2030. The first of approximately 80 million baby boomers will turn 79 this year (2025), which is the approximate age of entry into senior living. “And they’re coming our way at a rate of 10,000 a day, and they will be doing that, literally, for the next 15 years,” said Carle.
Boomers are the most highly educated retirement demographic in history, noted Carle. Nearly three in 10 boomers (29 percent) hold a bachelor’s degree or higher, and nearly 60 percent have “some college.” National and international surveys of baby boomers repeatedly have shown that they are seeking active, intellectually stimulating, intergenerational retirement environments, he emphasized.
“If you think about it, I just described the college campus. And what we know about boomers is they are not interested in living on an elderly island — it doesn’t matter how nice it is. That intergenerational component is maybe the most important one,” said Carle.
Strategic benefits for the university
The enrollment of traditional college students decreased by three million between 2010 and 2020, according to the National Center for Education Statistics. Meanwhile, 24 percent of adults age 65 and above are taking some type of college class, the U.S. Department of Education reports.
“As I’ve said to more than one university president: ‘You’ve got two choices here. You can either hope we all start giving birth to baby geniuses who start college at age 5, or you can recycle your old customers. You tell me where the opportunity is.’ And so now we have their attention.”
Baby boomers control 70 percent of the nation’s wealth, so having them on campus makes sense from a philanthropic standpoint as well, said Carle.
“Universities will spend hundreds of thousands of dollars, sometimes millions of dollars, reaching out to their alums. What better connection can you have than having them living on your campus? They’re right there, and they want to be there,” said Carle.
The other strategic benefit of URCs for universities concerns their mission. Universities embrace diversity, equity and inclusion (DEI) programs, which aim to serve the community, Carle pointed out. But those programs must include older adults, he insists, particularly since one in every five Americans will be age 65 and older by 2030.
“Where are the people with gray hair? Diversity includes age. Frankly, it’s quite ageist to pretend they don’t exist when that’s your mission.”
In short, Carle believes that many universities need to rethink their mission and the population they serve.
Other benefits
The educational and experiential benefits of a URC act like a two-way street. The seniors benefit from the university’s lifelong learning programs, guest lectures, visual and performing arts and athletic events. And the college-age students gain knowledge and experience through volunteer work, internships or possible employment at the URCs.
“Students like part-time jobs, and by the way this a great way to introduce them to careers in aging,” said Carle.
The operator of a URC benefits greatly from all that the university has to offer. “You can access literally tens of millions of dollars, hundreds of millions of dollars in amenities that the university has and is paying for. That’s tremendous value and a competitive advantage,” said Carle.
Formula for success
Carle has melded his 30 years of experience in the seniors housing business as an executive with his passion for teaching. In 2001, he created the first undergraduate curriculum for senior living administration at George Mason University, followed by the creation of a graduate curriculum at Georgetown University.
About 20 years ago, while teaching courses in healthcare, strategic planning and marketing at George Mason University, he learned of retirement communities affiliated with some universities.
“Long story short, I took an entire summer, drove 3,000 miles and visited the ones that existed at the time.”
From those experiences, Carle developed a five-criteria model, which he says sets up a URC for long-term operational success:
• The senior living community needs to be near the “core” campus facilities, typically within one to two miles.
• Formalized programming, backed up by written letters of agreement, is vitally important.
• Prospective residents prefer the senior living community offer a continuum of services (independent living, assisted living, skilled nursing and memory care).
• There needs to be a formal relationship between the institute of higher education and the senior living provider that could take the form of a land lease, royalties or shared services. Both parties need to have a “vested” interest in success.
• At least 10 percent of residents with ties to the university, such as alums or retired faculty and staff, occupy the URC. At the top URCs, that figure is 50 percent and above.
Give the people want they want
According to Plante Morgan Living Forward, the average penetration rate for seniors housing in the top 140 markets was 10.2 percent in 2023. (The penetration rate is defined as occupied seniors housing units divided by the 80-plus population.)
Carle said the seniors housing industry has come up with excuses as to why the penetration rates aren’t higher. “The recent excuse is no one can afford it. Well, I’m sorry, 80 percent of people over the age of 80 own a home, and 80 percent of them own it free and clear, and the average value of that house is a half million dollars.”
In other words, affordability isn’t the problem in many cases. “What’s happening is we’re not offering them what they want,” said Carle.
Business strategy is always about product differentiation and achieving and sustaining a competitive advantage, said the veteran executive.
“If people aren’t buying what you’ve got, there’s a reason. Go out and find out what they want. And what I’ve shown you here today is that we know what boomers want: active, intellectually stimulating, intergenerational [communities]. They want a college campus.”
— Matt Valley