On June 30th, Seniors Housing Business hosted a webinar, “Active Adult — How to Define It and Where is the Industry’s Hottest Segment Trending?” with our panel of experts.
Because the panelists were unable to answer all the questions asked during the Q&A portion of the webinar due to time constraints, below are answers to some of the audience questions from experts Michael Uccellini, The United Group; Margaret Wylde, ProMatura; Mitch Brown, Greystar; and Robert May, Avenida Partners.
If you missed last week’s Seniors Housing Business webinar or would like to listen to it again, click here.
Do you find you have to convince prospects who are owners on the rental model? If so, what is your approach?
“Not every prospect, but it is a process. It is about creating value: selling lifestyle, friendship, community, socialization, etc.” – Michael Uccellini, The United Group
“Like Michael said, most of our prospects and residents do not think of themselves as ‘renters’ in the transient sense typically ascribed to that term. This is their home.” – Mitchell Brown, Greystar
“I am in complete agreement with Mitchell and Michael. Renting no longer has the stigma it used to because the new generation multifamily product is so good. Our resident is seeking maximum convenience, a no-maintenance lifestyle that has the ultimate flexibility in commitment (i.e., a one-year lease). You can’t get that in an ownership model. There will always be those who just want to own, no matter what, and there are other developers providing that product. We do find that younger senior couples are more likely to be resistant to a pure rental product like ours.” – Robert May, Avenida Partners
“If they are owners and are considering rental, they may have decided they were ready to give up the responsibilities and costs of ownership.” – Margaret Wylde, ProMatura
In Independent Living (IL) units, we tend to see residents age in place and not move into Assisted Living (AL). Do you see the same in Active Adult? Are residents hiring in-home health and remaining in place?
“Yes, as long as you have a supportive lifestyle program with access to supportive services. We have that in our SUN® Program under the Health and Wellness prong. In some cases, yes, we see residents hiring in-home health.” – Michael Uccellini, The United Group
“With an average age of 72-74 even in projects that are 10-15 years old, we do not see the same issues as traditional IL aging in place. When residents need assisted living, they move out. But given the younger starting age versus IL, we can retain our residents for several years. We do like the idea of co-locating with AL/MC with a separate operator.” – Mitchell Brown, Greystar
What is your strategy on unit mixes? Which floorplans have you found to be most successful?
“We have 45%-55% one-bedroom units and 55%-45% two-bedrooms units. Sometimes we have penthouse units and townhomes. The floorplans depend on the community and the geographic market area.”– Michael Uccellini, The United Group
“Avenida has gone as high as 60% one-bedroom units where it was evident that price sensitivity was a big concern and/or parking was going to be very limited. The workhorse floorplan that has the most universal appeal and is cost-effective to build would be a very typical two-bedroom/two-bathroom unit with center living room at 1050 net rentable square feet. Plans with an area for a real dining table and a kitchen-sink window are considered most like the single-family dwelling or condo they may be downsizing from.” – Robert May, Avenida Partners
“We find it depends on the location and consumer preferences. Defining the right product mix speeds up sales.” – Margaret Wylde, ProMatura
Given your recent experiences in Florida [Editor’s note: tune in to 59:48 in the video to hear more discussion about Florida properties], for example, do you think the end user really understands the difference between IL and age-restricted apartments or was there just a disconnect in the pricing difference between your projects and the multifamily or condo rental market?
“Florida is tough market to lease IL lite in, as there is a lot of senior product (CCRC, AL/MC, NH and IL). There is not a lot of true active adult product in Florida. In some markets the days on market (DOM) for home sales are less than 3 months and in others they are 5-7 months. Less than 3 months is the market you want to be in for active adult. It is tough to educate the public about our IL lite product as there are so many condos and higher-level care senior housing. Plus, the incoming resident is two to four years older than in other markets with similar product.” – Michael Uccellini, The United Group
“We have five projects in Florida (four ground-up developments and one acquisition). Monterey Pointe in Kissimmee is a mid-market acquisition and is doing well. We recently opened Overture Dr. Phillips in Orlando, and it is leasing up nicely. This is a four-story, wood frame, surface-parked project. We are building another similar project in the Hamlin area of Orlando that will deliver in early 2021. It will slot in between these two projects that we are very excited about. The two urban, Type I, structured parking communities in the Miami area (Dadeland and Doral) do compete more directly with higher-end, non-age-restricted residential options and/or luxury IL and CCRCs. We are moving them in different directions in response to what we see in the local markets, including adding AL to Dadeland to complement the IL offering there and unbundling the services at Doral to respond the younger, active residents in this market. Both are very high quality assets in strong mixed-use locations.” – Mitchell Brown, Greystar
“A couple comments on the question of pricing as it relates to the product niche in general: I think we are still discovering the properly triangulated price point that is between the Class A multifamily and traditional IL product that would be considered alternatives for seniors who wants to downsize (or rightsize). In the Florida markets, what we have seen is a real need to look at the shadow market of alternatives. To Michael’s point, the entire state of Florida seems to be one big naturally occurring retirement community (NORC), so the art of price setting is more complicated than what we are experiencing in the more traditional markets. Where the active adult product ends up price-point positioning as a premium to conventional multifamily and a discount to traditional IL is almost a micro-locational analysis.” – Robert May, Avenida Partners
Click here to listen to the entire panel discussion.
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