What makes the 55-plus market one of the most intriguing in the multifamily sector? The reasons abound as do the number of prospective residents. First, the market is large—valued at $565 billion—and projected to grow at compound annual growth rates of a bit more than 4 percent over the next eight years, according to Grand View Research Inc.
Second, the 55-plus generation is living longer, healthier lives and many Baby Boomers prefer residing in settings alongside those who share active lifestyle interests, according to a recent NIC white paper on these communities. Younger boomers, 58 to 64, who indicate they will be likely to move in and stay put at 55-plus communities once retired, show a clear preference for maintenance-free active living, as opposed to independent or assisted living communities.
Third, rents in 55-plus adult communities, while not as high as those in independent-living settings, tend to be significantly higher than in typical apartment communities. According to NIC, rent rates at 55-plus properties typically are 10 percent to 30 percent higher than comparable multifamily, and 20 percent to 50 percent lower than independent living properties in the same area.
Fourth, costs are lower. While some communities offer a limited breakfast menu, most do not provide lunch or dinner service, meaning fewer operating costs and less need to surmount the hurdles of today’s labor shortages. In addition, because the communities serve healthier senior citizens, health-care licensure is not required.
Finally, older Americans appear to increasingly desire an intermediate step between leaving their long-time homes and entering continuing-care communities, and see the 55-plus setting as just such a stepping stone, according to NIC’s white paper.
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