If retirement truly is just a long vacation, then some of the west coast’s wealthiest old folks may be gearing up for an extended stay at a luxury resort.
In San Francisco, urban housing developer Related Companies is teaming with Atria Senior Living, a major senior-housing operator, to open a 208-unit project packed with amenities like an outdoor pool, bocce ball courts, and a rooftop terrace. One look at the eye-popping monthly rents – anywhere from $8,000 to $25,000 – threatens to put a prospective resident’s Life Alert to good use.
The Old Man And The Three (Thousand Square Foot Apartment)
The massive generational shift of retiring baby boomers is rejiggering the economics of the entire senior housing industry. “Between 2005 and 2018, the over-80 population grew by 200,000 or less per year,” Atria chief executive John Moore told The Wall Street Journal. “Last year, it grew by 325,000. This year, probably 450,000. Next year over 600,000.”
That’s a lot of new Bingo players, and there may not be space to house them all. The average senior-housing occupancy rate in 31 major US markets was 81% in Q4 2021, and pre-pandemic the figure was closer to 90%, chief economist of National Investment Center for Seniors Housing & Care Beth Mace told the WSJ.
The looming prospect of mass baby boomer retirees – and the generation’s considerable wealth – is driving market segmentation to cater to more luxury-seeking clientele, and the Related-Atria group aren’t the only ones tapping the emerging market:
- Private equity firm Kayne Anderson Real Estate Advisors, which manages 2,800 units across 13 properties, charges an average monthly rent of $13,000 at its Brooklyn facility, and is currently developing a new building in New Orleans.
- The Pritzker family’s luxury-oriented Vi Living is planning a 320-unit development in Scottsdale, Arizona, and its president tells the WSJ the brand could open 10 or more similar communities in the next half-decade.
You Can Take the Senior Out of the City: The Related-Atria venture is also planning a 120-unit facility in Manhattan’s Hudson Yards neighborhood. In general, the high land and construction expenses of downtown developments are driving up rents. “Seniors who are urbanites want to remain urbanites,” Moore told the WSJ.