Revitalization for Aging Retirement Communities
Improvements in health care and personal hygiene continue to extend the active lives of growing numbers of Americans. However, in many cases, no parallel attention has been addressed to the dwellings and communities that constitute their primary living environments. Recently, Parker Associates has been requested to examine the environments of several mature retirement communities with the objective of revitalizing them for attraction to replacement retirees. Some key findings and conclusions are summarized in this blog.
Despite the continuing impact of the Great Recession, exacerbated by negative effects of the European banking crisis, home sales are slowly expanding throughout the United States. Households of all age groups are searching for initial or replacement dwellings, and a growing number are showing renewed interest in vacation and retirement homes. Most markets are experiencing growing housing demand — but not all. Included in those neighborhoods experiencing too few potential buyers compared to sellers are amenitized retirement communities developed during the surge of buyers in the 1970s and 80s. For a variety of reasons, many never fully achieved completion or were adequately maintained. Now in the new millenium, with New Age consumers, these older communities no longer exhibit the same appeal as they did for their initial residents 25 or more years ago (a large proportion of whom are now considering moving to less active lifestyle locations or their homes have passed on to heirs). But, new lifestyle choices are constrained by inability to sell their former dream homes (now up to 40 years old) in a community which has lost its buyer attraction.
As buyers continued to decline in number during the Great Recession, residents of many retirement communities became concerned about their increasing lack of mobility. Several approached Parker Associates for advice on how to revitalize their communities to increase their appeal to the new wave of “Baby-boomer” retirees – prospects who reportedly are purchasing retirement homes in newly developing communities, but by-passing mature communities.
The problems of aging for buildings and communities are similar in many ways to those experienced by human beings. Physical infrastructure often was not developed and/or maintained to adequately accommodate the emergent uses required of it. Current resident interests were not adequately foreseen by community planners. Assumption of residual property and infrastructure maintenance by property owners associations (HOAs and POAs) often resulted in inadequate funding, and hired management sometimes resulted in rudderless or random deviation from carefully designed initial planning. Departure of the original developer often was accompanied by cessation of marketing programs, including entrance merchandising (first impressions) and hospitality programs (visitor inducements). Original long-term budgets often were based upon full development buildout, whereas, for a variety of reasons, initial master plans were not completed and annual revenues proved inadequate to growth needs.
In addressing their aging plight, most ownership groups established resident committees which often were dominated by former executives from unrelated industries who applied lessons from their work experience and often proposed consultant firms without significant experience in community real estate ventures. Most appeared to treat the aging problem as a marketing issue without due respect to the interrelationships between the “product” and the characteristics and preferences of current consumers in the retirement age bracket. First response action usually includes a survey of current property owners (not prospective consumers). Requests for consultant assistance usually are directed toward advertising and graphics specialists without regard to the holistic nature of the selling problem in terms of product definition and consumer preferences providing an adequate basis for targeted communications. Most house and lot sales are brokered by local real estate agents.
Revitalization for aging retirement communities is an emergent problem of very large scale that has not appeared to attract the interest of professional real estate developers, despite the fact that many of these existing communities with excellent amenities have considerable undeveloped land. They exist in both waterfront and mountain locations at all price levels with a wide range of attractive amenities.
The logical solution to revitalization of incomplete aging retirement communities is to address the issue in similar format to a new master planning process in which the consumer characteristics differ from those of current residents, the product contains irregularities that must be resolved in a revised strategic plan along with both natural and manmade amenities, and the organizational structure must be tailored to the existing organization of each community. The marketing program must be an organic outcome of strengths and weaknesses of a new strategic plan.
Parker Associates believes that potential joint ventures with the property owners of the dozens of aging retirement communities in the United States Sunbelt constitute excellent profit opportunities with modest capital funding for experienced community developers.
David F. Parker