MultiFamily Executive-By Barbara Ballinger
Baby boomers, the cohort born between 1946 and 1964, are a generation that’s never planned to slow down
And with their 18-year age span stretching from 51 to 69, boomers naturally don’t represent a one-size-fits-all target market. Their schedules vary widely, too—whether engaged in full- or part-time work or complete retirement. And their assets may dictate living in anything from an affordable, $1,200 apartment to a luxe, $3 million condo.
Indeed, because of the diversity among the boomer ranks, the spectrum of housing that appeals to them is wide and includes affordable and market rate, rental and for sale, urban and suburban and is geared to couples and singles, a mix of ages, and those who care—or don’t—about LEED status.
All of which presents apartment developers seeking to serve this group—76.4 million strong—with a multitude of opportunities as many move from homes where they raised families to settle in for what they optimistically believe will be a long time frame.
“The sector is only growing, and, for now, demand outstrips supply,” says Russell Tepper, senior managing director at Mill Creek Residential Trust, a Dallas-based development and investment firm focused on luxury multifamily rentals.
Despite their diversity, there are some things most all boomers seem to gravitate toward, experts say, including a desire for new rather than existing housing, says Diana Pittro, executive vice president of RMK Management Corp. in Chicago, which manages more than 9,000 Midwestern rentals. Brian Hoffman of Red Seal Homes, a family developer in Northbrook, Ill., also puts new product in the top ‘wish list trifecta’ for this age group, along with ample storage and low maintenance.
Other housing features boomers want: a strong Walk Score, a variety of floor plans from which to choose, and, of course, amenities aplenty.
A bustling downtown is a prime destination for boomers, sometimes in a big-city metropolis; other times in a large suburban core, such as Bethesda, Md., or Highland Park, Ill.; and even in a bucolic haven like Woodstock, N.Y.
The key for boomers regardless of location, however, is their housing’s proximity on foot to enough destinations to meet their needs, stay healthy, and spend less time driving, particularly in areas with worsening traffic congestion, says Amit Price Patel, an architect and urban designer with David Baker Architects in San Francisco.
Many of his firm’s projects—both affordable and market rate—are located in cities and semi-urban areas close to retail and public transportation. The firm built its affordable Station Center Family Housing building with 157 units in Union City, Calif., 30 minutes to San Francisco by the BART mass-transit system. Nearby, the firm’s market-rate Windflower Lofts consists of 243 rental homes, 40 of which are live-work lofts.
And in much larger Philadelphia, Dranoff Properties has focused on boomers since 2005, when it debuted its 32-story Symphony House, with 163 condos on top of a parking garage, restaurants, and theater. “It was our indoctrination to boomers,” says CEO Carl Dranoff, who points to One Riverside, a 22-story glass skyscraper with 82 residences but only four to six per floor and views of the Schuylkill River.
Resource Real Estate, a global real estate firm also in Philadelphia, has chosen to zero in on younger boomers still working and raising families who gravitate to locations in the Southeast and Southwest where jobs and good schools are plentiful. The company builds rentals that the group’s $40,000 to $75,000 annual incomes can afford, says CEO Alan Feldman.
“Boomers now have less of a desire to own two cars and maintain a large house and property,” he says.
Smaller Quarters, Higher Quality
As Feldman has found, many boomers are eager to give up their large homes once their children move out for good, even if they’ve had boomerang kids who came back temporarily, says Dranoff. On their own and possibly retired, these empty-nesters don’t want the associated maintenance chores and costs when they’d rather travel or pursue other interests.
Yet, many aren’t willing to settle for square footage as small as their millennial counterparts will tolerate, often because they don’t want to pare their furnishings, says Price Patel. Hence boomers’ desire for ample storage space, particularly in the master suite, laundry area, and garage, says Manny Gonzalez, architect and principal in KTGY Group’s Los Angeles office.
At Holland Development’s suburban Portland, Ore., project, Portera at the Grove, its first project for the 55-plus set, a one-bedroom averages 850 square feet; a two-bedroom, 1,485 square feet; and a three-bedroom, 1,490 square feet, which the company says is large by senior housing standards. The company also decided to include more two- and three-bedrooms than one-bedrooms and incorporate full-size washer/dryers.
But smaller can be relative. Affluent renters and owners may seek much more space, though less than they had in their former homes. Dranoff’s condos average 1,700 square feet for a two-bedroom or a two-bedroom-cum-den, but some go up to five bedrooms. They typically include his-and-her bathrooms, wood cabinets, fireplaces, and color palette choices for $1,500 a square foot. And that number is climbing as it becomes more difficult to assemble large sites and construction costs rise, he says.
Developer Jean Francois Roy, owner of Ocean Land Investments in Fort Lauderdale, Fla., conceptualized multistory buildings for affluent boomers who shared his frustration. “After my kids left home, we decided to give up our home but couldn’t find a product that appealed,” Roy says.
The first of his firm’s five waterfront properties, AquaVita, will have units that average 3,000 square feet, three and four bedrooms, oversized kitchens with 10-foot-long islands, huge balconies, and shared amenities such as a 65-foot heated pool, private cabanas, and boat slips.
The site is also within walking distance of Las Olas Boulevard and the beach. Price tags started just shy of $1 million and climbed to almost $3 million before the units sold out in eight months. Roy plans to limit the number of units in all five buildinge to between 16 and 24, so that move-down homeowners don’t have to wait years for their completion.
Rental Stigma No More
For many boomers, the stigma of renting has disappeared. Many could afford to buy another home with the equity from the sale of their last one but prefer not to. Statistics from the Census Bureau point up the shift, says Philip Martin, head of market research and investment strategy at Waterton Associates in Chicago, with homeownership having dropped from 69.4 percent at its 2004 peak to 64.3 percent, the lowest level since 1994.
Martin, whose firm has a portfolio of 18,000 rental units, cites being able to lock up and leave without worry as one of the prime reasons boomers find the option of renting appealing. Using the equity from a sale as a “wealth management tool” for retirement and discretionary purchases is another, Martin adds.
Nia Walters, regional vice president of Irongate Management, a third-party manager of multifamily properties throughout the country, based in New York, adds yet another: ease in calling or texting maintenance staff for help, gratis.
“Boomers require more time and interaction from our staff than millennials do,” she says.
Even when renting, boomers may still invest to personalize their space, such as buying new cabinet hardware or making a more-involved change in flooring, Walters says. As a result, Martin predicts, developers will offer options from an à la carte price list.
Segregated … or Mixed
At this stage in life, many boomers prefer to live just with peers, which spurred Holland Development to construct Portera at the Grove for those age 55 and older. Dominium Development & Acquisitions, a national affordable housing developer and management firm in Plymouth, Minn., has also gone after this age group but with what it terms “luxury affordable” housing in areas with high median incomes and sites that the company often acquires from cities, sometimes with existing structures that Dominium adapts.
“Many cities find senior affordable housing appealing as a way to retain population, especially since the cohort has fewer cars, which means less congestion,” says Ron Mehl, senior developer.
Dominium designs its product to resemble market-rate units. Yet other developers, like Mill Creek, find boomers want the energy and buzz that come from having younger residents around.
While their former homes may reflect traditional space planning with walls separating sitting, eating, and cooking rooms, many boomers want the hipper open plans that don’t just encourage everyone to head for the kitchen but provide one giant, minimalist, loft-style space. The result reflects a blurring between what boomers and millennials want, says Patel Price. Fewer walls also make furniture arranging easier. And though bedrooms remain separate, they feel more open with larger windows for more natural light.
Most boomers aren’t interested in rocking chairs, even with great views, unless it’s after a long active day. They want their buildings, including associated outdoor space, packed with possibilities. Much of this amenity envy has come from seeing what new millennial-oriented buildings feature to woo occupants—the latest fitness equipment with room to bring in personal trainers, proximity to trails or parks, indoor and rooftop swimming pools, demonstration kitchens, dog parks and grooming stations, food service, an array of concierge services, and more.
Even though they’ve given up homes with outdoor space, many boomers still want to garden on a balcony or in shared acreage. “We’ve been surprised to see that men garden almost as much as women,” says KTGY’s Gonzalez.
Boomers also want space for their own gatherings. Winston Fisher of Fisher Brothers, a development firm in New York, finds party rooms with kitchens are appealing for hosting dinners away from units. And even lobbies, stairs, and landings are constructed larger for impromptu gatherings, says Price Patel. “The need for human connection is universal,” he says.
The concept of greater service as an amenity, too, is growing. Developer WaterWalk Hotel Apartments in Wichita, Kan., which previously focused on extended-stay hotels, debuted its above–market-rate apartment brand concept for those seeking a high-end but small enough community that would provide personalized service. The first, four-story building, with 138 units, opened in Wichita two and a half years ago. “We couldn’t do this if it were a larger property,” says president David Redfern.
Sustainability, with more and more projects becoming LEED certified or including green building materials and systems, is another perk. Admittedly, sometimes, green certification is done to comply with building codes, as in San Francisco, says Patel Price. “We push where we can, and it’s more energy efficient and often reflects better materials,” he says. Other times, developers go green because doing so represents smart marketing. Martin, for example, has found many boomers seek out green initiatives such as rooftop gardens and culinary centers.
For the Long Haul
After deciding to move, boomers are eager to find a location for the long haul where they can age in place comfortably and independently. Firms like KTGY are helping meet that need by specifying zero-threshold showers in all units to reduce accidents. Other universal design features—wider doorways, grab bars, slip-resistant flooring—are expected to become more prevalent too.
Some developers are even starting to extend their rental leases beyond the typical year (with a stipulation for price hikes) in response to this growing desire for long-term living.
Wherever boomers decide to head, developers and leasing and sales staffs are pleased about how they make decisions. “Most decide on the spot, unlike millennials, who bring back every family member for an opinion before they decide,” GFI’s Walters says.