With varying existing perceptions of what the growing “active adult” property type is, the National Investment Center for Seniors Housing & Care on Thursday released a definition in an effort to unify thinking and help potential investors:
“Active adult rental properties are age-eligible, market rate, multifamily properties that are lifestyle focused; general operations do not provide meals,” the organization said in a new white paper.
“By formally defining this segment, NIC is enabling centralized data collection on the segment and opening the door to additional investment that will increase access and choice for millions in a vital, emerging market,” NIC President and CEO Brian Jurutka said.
With the definition, the market can be measured to allow for comparisons and knowledge-sharing, NIC said. The organization noted, however, that “the definition and the property type is expected to evolve as the product matures.”
Definition has several components
According to NIC’s definition, active adult properties must have an age restriction for residents, typically meaning that one resident in a household must be 55 or older, 62 or older, or 65 and older, depending on the local governing jurisdiction.
Properties utilizing low-income housing tax credits are excluded from the definition, as are for-sale properties and communities consisting only of single-family homes.
Also in the NIC definition, active adult communities do not include lunch or dinner in their base rents, although they may offer “light dining” options such as continental breakfast or happy hours. Additionally, NIC said, active adult communities are lifestyle-focused.
The property type caters to older adults who have lower health needs and prefer an active, community-based lifestyle where they can live among their generational peers, according to NIC’s definition. Residents typically are younger and healthier than independent living and other traditional senior living residents, moving in in their late 60s to their mid 70s.
“It fills a market need and serves as a bridge between conventional multifamily housing and traditional senior living options,” NIC said.
Attractive investments
Active adult properties are attractive investments because they do not require healthcare licensure, involve fewer resources to operate and experience less frequent turnover, NIC said.
“Delivering enough senior living options to fit aging boomers’ active lifestyles is going to take greater transparency to help the market’s stakeholders understand the segment and its growth opportunities,” Jurutka said.
With the active adult segment definition, NIC said that its affiliate, NIC MAP Vision, will be able to collect segment-specific data about the characteristics and financial performance of more than 200 active adult properties across the nation. More robust data, including operational performance and additional property coverage, is expected early next year.
The white paper is available for download with registration on NIC’s website.
