Active Adult

What is “Active Adult”?

Active adult communities are age-restricted multifamily properties tailored to the convenience, lifestyle, and amenities of residents 55 and older. These communities are attractive to those looking to downsize from their current residence and live in a communal setting. However, they do not need care services or assistance with daily living and want to avoid dealing with the hassles associated with home ownership.

In an active adult rental model, residents have:

No

Mortgage Payment

Entrance Fee

Upfront Home Acquisition

Real Estate Taxes

HOA Dues

Home or Landscape Maintenance

Required Schedule

Benefits for Investors

The following are some of the benefits for investors in active adult communities compared to traditional multifamily and other types of traditional seniors housing:

  • Active adult communities lease-up 2x to 3x faster than independent living.

    Source: NIC Investment Guide – Investing in Seniors Housing & Care Properties, Sixth Edition

  • Annual resident attrition in the active adult sector is slower than multifamily – approximately 20% vs. 50%, respectively.

    Source: NIC Investment Guide – Investing in Seniors Housing & Care Properties, Sixth Edition

  • Active adult communities have significantly less staff than traditional seniors housing communities as care and dining services are not provided.

    Sources: NIC Investment Guide – Investing in Seniors Housing & Care Properties, Sixth Edition

  • Due to generally longer stays and lower expenses, the margins at active adult communities tend to be higher than those in traditional seniors housing.

    Source: Active Adult Rental Properties – Defining the Emerging Property Type, NIC

  • The active adult sector leads all other seniors housing areas in investor sentiment and is considered the “top investor opportunity” in the sector. Active adult communities also generally command the lowest cap rates in the sector.

    Source: CBRE U.S. Seniors Housing & Care Investor Survey 2023

  • The average age of residents in active adult communities are 72-74 years old, which is significantly younger than independent living, which is approximately 83 years old, and can lead to longer stays in the community.

    Source: Active Adult Rental Properties – Defining the Emerging Property Type, NIC

Why focus on the middle-market?

The majority of active adult or traditional seniors housing owners and operators focus either on the most affluent or lowest-income potential residents in any given market.

On one end of the spectrum, these are people who can afford to pay the highest private-pay monthly rates, which for independent living can be between $2,375 and $4,100 on average, and on the other are people who qualify for low-income housing.

However, there exists a large amount of the senior population that, while they do not have the resources to live in the higher-end active adult or traditional seniors housing communities, they also have too many resources to qualify for low-income housing options. By 2029, it is projected that there will be about 14 million of these seniors. This demographic is known as the "missing middle."

Unbridled Living exists to provide a high-quality and more affordable solution for the "missing middle" seniors who wish to maintain their independence within a communal setting after downsizing, yet are not ready for full-time assistance with their daily living.

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