Baby boomers redefine senior housing market

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Today's active adult communities are catering to a new class of older Americans who are healthy, financially secure and socially oriented, who may or may not be retired, and who are "definitely not interested in shuffleboard," according to a panel of professionals assembled by the Urban Land Institute.|ret||ret||tab|

The panel addressed the outlook for senior housing during a forum at ULI's annual fall meeting in Chicago.|ret||ret||tab|

According to statistics provided by panelist Gregg T. Logan, managing director of Robert Charles Lesser and Company in Atlanta, the large number of people heading toward retirement indicates a clear need for more adult communities: the number of people now in their mid-50s (approximately 76 million) has more than doubled from one generation ago.|ret||ret||tab|

However, "the increased demand from the baby boomers will not be for the same product," Logan said in a ULI release.|ret||ret||tab|

Unlike their parents, who saved money in the bank, were cautious about making major purchases, had children early in their marriages and retired to spend more time with their grandchildren, baby boomers "want everything now, have a lot of money in the stock market, are still working (some as consultants), may have young children from second marriages and are buying second homes for weekend getaways," he said.|ret||ret||tab|

Panelist Jason Robertson, vice president of commercial operations for Miami's Avatar Properties Inc., added that the different housing needs and lifestyles of baby boomers has made communities centered solely around golf courses obsolete. |ret||ret||tab|

Rather than gathering at the clubhouse after 18 holes, today's adults are demanding town centers with large, fully equipped fitness centers, indoor lap pools, jogging tracks, restaurants and informal socializing areas, he said.|ret||ret||tab|

"The key to making these communities work is to have all the amenities in place at the outset. These people don't buy green bananas," Robertson said. In addition, they are seeking floor plans with less defined space that allows for highly flexible use, he said.|ret||ret||tab|

The "customer, context and contest" related to adult communities has changed, said panelist David Schreiner, senior vice president of Del Webb Corporation in Huntley, Ill. |ret||ret||tab|

"The customers are more unpredictable in their housing needs and demanding much more variety in adult communities. |ret||ret||tab|

The context in which we are building has changed, due to challenges brought on by a strong anti-growth sentiment. |ret||ret||tab|

And, the contest is more competitive. More and more companies are getting into this market," he said.|ret||ret||tab|

Del Webb Corp. likely will start building smaller communities in more locations, in response to a desire by more adults to retire in place, Schreiner said. Some new sites for developments probably will be downtown infill locations, he added. |ret||ret||tab|

Schreiner said that baby boomers do not view their moves into adult communities as being their last. "They don't see themselves as moving into a retirement community. They see themselves are being actively engaged, and they have a strong tendency toward mobility."|ret||ret||tab|

Also, although many baby boomers are financially able to purchase upscale units, most are buying less than they can afford; instead, they are choosing to use only part of the equity from their former homes for the adult housing and are investing the rest elsewhere, said Norman Dreyfuss, executive vice president at IDI-Maryland Inc. in Silver Spring, Md. |ret||ret||tab|

"The key is the extent to which people feel wealthy," he said. |ret||ret||tab|

One factor that has not changed is the desire for a safe environment, he said. "Security is still a top priority in adult communities," Dreyfuss said. |ret||ret||tab|

Panelist Kathleen B. Cecilian, president of K.C. and Associates, Flemington, N.J., pointed out that the large transfer of wealth that will occur through inheritance (by some estimates, $3.4 trillion will be passed on to baby boomers within the next decade) will likely result in baby boomers making multiple home purchases in various adult communities. |ret||ret||tab|

In addition to being affluent and well-informed, buyers in adult communities are likely to be socially minded, and will want to purchase from companies they perceive as like-minded, she said.|ret||ret||tab|

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