GRADING WILL LIKELY BEGIN THIS SPRING in Riverside, Calif., for an age-qualified community called Aquabella. Developers proclaim the new community, neighboring Orange County just to the east, will push the envelope on product diversity, amenities, and services for aging baby boomers. You know, the ones driving the retirement market's expectations in every region of the country.

“There's really nothing like this,” declares Iddo Benzeevi, whose company—Los Angeles-based Benzeevi Holdings—and Miami-based Trump Group formed Highland Fairview Properties to develop this real estate, which it acquired from the University of California Regents last year for $55.1 million. Benzeevi projects that Highland could pump $400 million into Aquabella before the first home is built. The community, he says, “will be real resort living, without the hotel.”

The 3,000-lot neighborhood will offer up to 10 attached and detached home styles ranging from 1,200 to 3,500 square feet, including a multi-family “mansionette” with an estate-like exterior. Lakes and walking trails will encircle the homes, with two medical centers on the periphery of the 22-acre grounds. Buyers interested in continuing their education can walk from Aquabella to the local community college, or take a short drive to the University of California-Riverside. Plans also call for a 50,000-square-foot activities center that includes a gym, a spa, and a banquet hall with a 600-person capacity. Food service is a distinct possibility.

Aquabella will abut a PGA golf course. Five minutes away is one of the area's largest shopping malls. One mile away is Lake Perris, a popular recreational haven. The ocean and the mountains are a mere few hours' drive. Perhaps most important of all, Aquabella in Marino Valley will be 90 minutes from Los Angeles and San Diego, a compelling selling feature for buyers who choose to stay close to family and friends.

TOP 20 ACTIVE ADULT BUILDERS BY PERCENTAGE OF THEIR BUSINESS: The active adult product plays a bigger part in some companies' business than others. Here are the companies that take it the most seriously. Time will tell whether Aquabella emerges as the next big thing or simply an extravagant passing fad. Benzeevi wouldn't name the builders he'd spoken to, and a source familiar with this project said that the developer was haggling with builders over whose amenities package would win out. What's certain is that the Aquabella vision hits virtually every hot button builders can imagine as they create and plot out their active adult strategies. What's more, Aquabella attests to a competitive fray that intensifies by the day—some of it emerging from unexpected—it awaits builders keen to make a killing in an active adult market almost everyone's convinced will be the housing industry's sweet spot for the next two decades.

When builders and developers lie awake at night, instead of counting sheep they might entertain visions of the 76 million baby boomers who, beginning in 2011, will reach 65 at a rate of more than 11,500 per day for the next 18 years. To say that companies are rushing into this potentially explosive market is an understatement. Once-casual participants like Centex and D.R. Horton now see active adult as a strategic cornerstone. So too do such entrants as timeshare developer Westgate Resorts. Eighteen of 22 communities that Lennar Corp. has under contract for future development will be active adult. Even KB Home, which hasn't officially entered the age-qualified sweepstakes, claims that most of its neighborhoods offer at least one home type amenable to seniors, who represented 9.7 percent of its customers in 2004, said spokesman Derrick Hall.

Yes, some builders take the active-adult plunge as a way to mollify municipalities more apt to rubberstamp childless homes that won't overburden their towns' schools and infrastructures. And yes, some builders design active adult homes by looking in their rearview mirrors to see what's sold best before. But as more players join the party, smart builders and developers are refining their marketing and development strategies, not only to differentiate their communities from the rest, but also to address a customer base that, as it swells the post-60 ranks beyond recognition, is fragmenting along lines that will have as much to do with lifestyle and culture choices as they do with income levels and location.

“The biggest challenge is that the [buyer] target keeps changing and will become even more diverse over the next five to seven years,” says Deborah Blake, the Phoenix-based vice president of marketing for Pulte Homes' six divisions in Arizona and Nevada, one of Pulte's prime active adult regions. “It's not just about the built community anymore.”

Seismic Matters Builders and developers have come to realize that, as boomers age, they want the same things they demanded as younger buyers: choices, quality, and customer service. “Buyers are kicking the tires and are becoming more discriminating, so builders had better be ready,” says Bill Feinberg, whose Philadelphia-based consulting firm Feinberg & Associates works with several builders.

But beyond vague references to “lifestyle” and “wellness” and “maintenance free,” many builders admit they haven't sorted out what boomers expect from a retirement community. “Until now, we've been selling to the Eisenhower generation, and I don't think anyone has an understanding into [aging boomers'] buying habits yet,” says Scott Glauf, vice president of strategic marketing for Centex Homes in Chantilly, Va.

Learn more about markets featured in this article: Los Angeles, CA, Phoenix, AZ.