By Matt Valley
AUSTIN, Texas — The Del Webb active adult brand, long associated with Sun Belt markets, is gaining traction in the Midwest, says Ryan Marshall, president and CEO of Atlanta-based PulteGroup Inc. (NYSE: PHM), parent company of Del Webb. But unlike Sun City, Arizona — the pioneering planned retirement community developed by Del Webb starting in 1960 — today’s developments are much smaller in scale.
Del Webb Hickory Greens, located about 25 miles southwest of Cleveland in Columbia Township, Ohio, officially opened in March of this year. The 622-home community is spread across 325 acres, where residents age 55 and older can enjoy a variety of resort-style amenities designed to foster an active and social lifestyle.
The centerpiece of the community is a 14,000-square-foot amenity center featuring indoor and outdoor pools, outdoor pickleball courts and a fitness center. Del Webb Hickory Greens also offers year-round social events, walking trails, over 170 acres of green space, a dog park and a community garden.
“It’s one of our best-selling active adult Del Webb communities year to date,” says Marshall, noting that the Cleveland market is not traditionally known as a hotspot for retirees. “We’ve probably sold 110 homes [at Del Webb Hickory Greens] since February, which is pretty tremendous.”
The comments from Marshall came Tuesday, Sept. 9, during a one-on-one discussion with Willy Walker, chairman and CEO of Walker & Dunlop — one of the largest commercial real estate and financial advisory services firms in the U.S. — and host of the Walker Webcast, at the NIC Fall Conference.
The three-day event, which took place at the JW Marriott Austin, drew approximately 3,100 professionals from across the seniors housing and care industry. The interview session was titled “New Products for a New Older Consumer: Lifestyle Communities to Attract the Baby Boomers, Gen X and Beyond.”
As part of the discussion, the CEO shared where the Del Webb brand has been and where it’s going. Del Webb is active across 20 states and in more than 45 markets stretching from Phoenix to Austin to Atlanta to Charleston, according to the company’s website.
“We still do a lot of our business in those Sun Belt markets. But through the consumer segmentation work that we do, we found that there are a lot of active adult consumers that don’t want to leave the place where they’re currently living,” explained Marshall.
“A lot of people that live in Minneapolis and Detroit and Cleveland and Indianapolis — they don’t want to leave those markets. They’re working longer than they ever have. So, we saw that that consumer was no longer hitting the age of 55 or 60, cashing everything out and then traveling south. They were maybe slowing down, and they were working well into their 60s, maybe even into their 70s. They still wanted to maintain the relationships that they built in church and through their various clubs, whether it was civically or professionally. Maybe they had kids in town, but they didn’t want their big family home anymore,” added Marshall.
The Del Webb model gives prospective residents the opportunity to apply the equity from the sale of their larger single-family homes to one that is more “rightsized” for their current needs. What’s more, they will be with residents at a similar stage in life who want an active and engaging lifestyle.
Product Evolution
PulteGroup acquired Del Webb in 2001. The old model was to build massive communities. Sun City Hilton Head, located in the heart of South Carolina’s Lowcountry, opened in 1995. As of 2021, the community included over 8,000 homes and at full build-out is expected to reach 10,500 homes. Sun City, Arizona, had over 27,000 dwelling units (not all single-family homes) as of 2024. When it opened in 1960, the developer sold over 2,000 homes in the first year alone.
“You’ve probably been to some of those communities, and they’re beautiful. We still have some of them [in the portfolio]. The difficulty in those big ‘cruise ship’ Del Webbs is that they take a lot of upfront capital investment to get them off the ground, and then they’re a real drag on returns for the first number of years. When you get to the tail end of [developing] the community and you’re monetizing the remaining few lots, the returns are great,” said Marshall.
Another challenge is that the common spaces and amenities periodically need to be updated. The bigger the active adult community is, the more intensive that process can become.
“We came to the conclusion about 15 years ago that the ideal size of a Del Webb community for us is somewhere between 750 and about 1,000 homes,” said Marshall. “That size of community is big enough to have scale, and you can deliver all the lifestyle and the amenities that the buyer wants. It’s big enough to feel like, ‘Boy, there is something going on here.’ But it’s also small enough that we can get in and get out of the community somewhere between five and seven years, which we find is kind of a nice sweet spot. So, that’s predominantly the way that we’re developing communities today.”
At one point in the company’s history, Del Webb was a prolific golf course builder, according to Marshall. “We decided that’s a business that we don’t love all that much. Our residents do love golf. And so, when we’re doing our site selection process, we always think about whether there are golf courses nearby that we can have partnerships and relationships with without being the golf course operator.”
Site Selection Factors
Bearing in mind the responsibility of providing care to an aging parent often tends to fall on the shoulders of the eldest daughter, Walker wanted to know if Marshall is encountering situations in the Cleveland area where adult children are moving into active adult communities to be closer to elderly parents with caregiving needs.
That’s occurring in some instances, Marshall noted, but the opposite is true as well. “Maybe not so much in Cleveland, but in places like Raleigh, North Carolina; Charlotte and Nashville, where there’s been explosive job growth, we’re finding that the parents are chasing the kids [and grandkids].”
Anecdotally, Marshall shared that he’s married to an eldest daughter and has firsthand knowledge of the responsibility that presents. “When her parents retired, they left southern Indiana, they came to Atlanta, and they live within a couple of miles of [our home] because my wife is there.”
Access to healthcare facilities and hospitals for prospective residents is an important criterion in Del Webb’s site selection process as well, Michell emphasized.
The Future
Del Webb accounts for 25 percent of PulteGroup’s business. Additionally, it is the company’s most profitable brand and generates the highest gross margins, according to Marshall. “It a really big, meaningful, important part of who we are. It’s a bias, but I think it’s the most recognized, most valuable brand in home building.”
Even so, Marshall believes it’s imperative that the Del Webb brand innovate. “We can’t just sit on our hands, rest on our laurels and assume that it’s going to continue to be what it always has been, because the consumer is changing. We’re certainly serving today’s retirees very well. We’ve got great market share. The communities do incredibly well, but we’re starting to think about the 40-, 45-, 50-year-old potential retiree.”
Earlier this year, PulteGroup unveiled Del Webb Explore, which is targeting demand from Gen X buyers (born between 1965 and 1980) seeking resort-style living. The new offering features amenities such as state-of-the-art clubhouses, high-end fitness centers, zero-entry lagoon-shaped pools, pickleball courts, walking trails and more, without the limitation of having to be at least 55 years of age. The first Del Webb Explore communities are planned for Southern California and the Tampa Bay Area, with nationwide expansion already in motion.
The 50-year-old Marshall is himself a Gen Xer. “If you’re in Gen X, you don’t qualify to live in a Del Webb community because you’re not 55. And we also find that the Gen Xers bristle a little bit at the idea of going into a community where there are restrictions. We were the latchkey kids growing up. We had no restrictions. Our only rule was to come home when it’s dark, and I think we still want to live a little bit like that without rules or restrictions,” said Marshall.
Del Webb Explore homes include open-concept floor plans optimized for entertaining and everyday living, luxurious finishes, and flexible spaces to accommodate a dynamic lifestyle that includes friends and family of all ages. The homes also include desired features like zero-entry showers, widened hallways and carefully planned storage. Designs have been fine-tuned based on homeowner feedback
Del Webb Explore Palm Desert in Southern California is the first of these communities. Sales opened on Feb. 15 of this year. The community marks the division’s return to the desert, where the company has a long and successful history of building resort-style communities. The development is being built on 71 acres and will have 332 units at build-out.
Walker asked Marshall if PulteGroup has any plans for the Del Webb brand to expand into the assisted living sector to serve an even older age cohort.
“It’s not really our core competency and our expertise. We also found that our buyers [in the 55-plus segment] don’t want to think about long-term care. They’re just not there yet. They will be at one point in time. We’re all going to be there at one point in time,” said Marshall.
In short, Del Webb wants its brand to be about wellness and longevity and not about the less attractive sides of aging.
Marshall urged senior living operators in the audience to continue to develop “great properties” that will fill a void in the marketplace for aging seniors.
PulteGroup is one of the country’s largest homebuilding companies with operations in more than 45 markets. Brands in the company’s portfolio include Centex, Pulte Homes, Del Webb, DiVosta Homes, American West and John Wieland Homes and Neighborhoods.
PulteGroup’s stock closed at $134.58 per share on Monday, Sept. 15. That’s down from $140.06 per share a year earlier, but up sharply from $44.98 per share five years ago.