Dealmakers are always looking for the next best opportunity to create value in a a competitive market. In the world of real estate, there may be a new grey area that is beginning to attract capital. In the middle of traditional multifamily housing and traditional senior housing like independent living, assisted living, skilled nursing and memory care, a new form of senior real estate has seemingly emerged: active adult living.
Active Adult Living is geared towards those in the 55-plus market that are looking to stay active, and live in a highly amenitized, social community without the hassle of maintaining a home. These properties are more of a college campus for the 55-plus community rather than feeling like a nursing home or assisted living complex.
Deborah Smith, CEO and co-founder of investment bank the CenterCap Group, out of Stamford, Conn., points out: “The product concept exists in the multifamily space, but the senior housing space has typically been defined in terms of meal plans / medical assistance requirements. For AAL, the target market is loosely defined in terms of self-sufficient seniors who are looking for socialization and programming services.”
You might think these properties are being found in the traditional geographies with warm weather such as Florida, Arizona, California, but that’s not always the case. “Geography on its own is less relevant than proximity to where seniors (and/or their families) currently live. It should also be unsurprising that sometimes the locational decision is actually heavily guided by the families who want their senior family members close to where they are,” Smith mentions.
Firms including the Carlyle Group, Bain Capital Real Estate, and Greystar have all invested in or managed active adult living properties in their portfolios.
It will be noteworthy to continue to look to this class of real estate in the future and see how this new form of senior, active living sticks with the growing population of senior citizens.