By Christina B. Farnsworth

Like the Energizer Bunny, the new breed of active adults keeps going and going. Passing over sedate retirement communities, they're all about change, charm, choice, and connections.

A running track, a baseball diamond, a rock-climbing wall, stock tickers, and engineering classes: Does this sound like senior living? To many of the emerging active adult buyers (those ages 45 to 59), an active, fun, and stimulating environment is not a wish-list item; it's an essential.

"The new demographic suggests that these people want things their way. They're spoiled by the service," says Jon Fels, CEO of Avatar Properties, a subsidiary of Avatar Holdings, in Coral Gables, Fla.

Fels has shepherded Avatar's first age-qualified (age-restricted) project, Solivita, through its first year of sales. The community just south of Orlando, which will yield 4,000 homes, is on track to sell 350 in its first 12 months.

"We know that the buying decision is really made because of lifestyle. We decided to create a development that would raise the bar on active adult communities," says Fels. Solivita will be built out in 10 years, making it well-positioned to capture the leading edge of the new boomer business.

Boomers aren't a full market force just yet. Active adults purchase at age 62 on average, while boomers have just started hitting 55. In the next 10 years, 14 million of them will do so. They are already home shopping, so it's not too soon to plan for the market shift. And, as Fels points out, it takes a good 18 months for these buyers to make their choices. When they do, what will they buy?

New actives won't want to live in their parents' communities, says consultant William E. Becker of The William E. Becker Organization, a marketing firm in Teaneck, N.J. They're not interested in sedate. Boomers have already exercised far more wanderlust than their parents did at their age. Younger and healthier than past generations of retirees, they're already changing the rules about active adult living.

Super Service

Avatar's management decided just three years ago to use its significant land position in Poinciana, Fla., to start Solivita. Fels calls it a "working laboratory" that so far has confirmed Avatar's premise that these buyers want a vibrant lifestyle, no maintenance worries, and a high level of service. He sees Solivita as a brand prototype for more Avatar communities in Florida and elsewhere. The developer allocated significant resources for market research, studying several other industries, particularly in the hospitality arena.

Solivita buyers entering their new homes find monogrammed robes hanging in their closets and have breakfast delivered to them on their first morning. Workers coming into homes after move-in remove their shoes or wear special covers to protect the carpets. After surveying buyers, Fels added a concierge service to help them take care of home-related business when they're away. "It's an attitude shift," says Fels.

Forgoing the volunteer help typically found at seniors' communities, Solivita is professionally staffed. The menus at its three restaurants are geared toward a healthy lifestyle, and nutritional consultants study them continually. The community partners with local hospitals and colleges to offer educational activities and events. Fels' own staff has a vice president in charge of lifestyle.

Service also comes into play in the selling environment. Buyers know the drill, so "we don't use many of the canned expressions," says Fels. "We're trying to be flexible in design and include buyers in our building process--for example, accommodating the common request for delayed starts.

"We've tried to approach this not so much from a home builder perspective, but more as a hospitality provider." So far, Fels says, the returns have been impressive enough to add higher-priced product to its initial offering of $100,000 to $200,000-plus homes.

Florida Leisure Communities in Lakeland has taken a different approach, branching out into the age-targeted marketplace with Carillon Lakes, which has the requisite clubhouse that opened when the models did.

Senior marketing vice president Steve Buck calls the community's buyers classic active adults. By his reckoning, the age bracket starts at 59 1/2-plus, the first year a person can withdraw money from a retirement account without penalty. The remainder of the community's sales is split between new boomers ages 45 to 59 and dual-income professionals who have few or no children.

Close to Home

Despite forecasts, not all boomers will head South and West, a realization that Del Webb picked up on a few years ago. After decades in the sun, the Phoenix-based developer expanded into the Rust Belt to nab its share of buyers, in its Sun City Community near Chicago.

Red Bank, N.J.-based K. Hovnanian Cos. has been successful selling seniors housing in the region, especially in its home state. It's planning Four Seasons active adult communities in Upper Freehold, Passaic County, and Readington that will keep buyers near their New York-area families.

"Active adult buyers are staying closer to their families, grandchildren, and friends," says Hovnanian sales and marketing vice president Michael Villane. Some are still working, he adds, and they are not necessarily relocating to warmer climates as many of their parents did.

"More seniors will retire in their hometowns as more backyard resort-style communities are built," predicts Andy Detterline, director of sales and marketing for The McKee Group, a Springfield, Pa., builder of active adult housing in Pennsylvania, Maryland, and Delaware. "Unfortunately, this may cause traditional home builders and developers to make a lot of mistakes as they jump into what they perceive to be a lucrative market and try to catch up on the learning curve." For example, builders get into trouble when they build too far away from community services, he says. Despite their healthy, active lifestyleseniors don't buy in communities where they have to travel great distances to medical facilities, post offices, and other services they depend on.

Lifestyle Lures

Mature buyers who do move aren't just sitting around in rockers on their front porches. "We're noticing a growing share of 'preretirees' in active adult communities," says Gary M. Ryan, vice president of Village Homes of Colorado, in Littleton, Colo.

Because these buyers aren't slowing down, you need actual amenities, not promises, to attract them. Dychtwald reports that 16 million 50-plus adults exercise at least three times a week. From 1987 to 1995, the number of 55-plus health club members jumped 119 percent; the number of 65-plus members jumped 669 percent.

Recognizing this, Avatar put in the town center at Solivita before sales began, and new buyers say that it was a major selling point. "We were new to the scene and wanted to establish credibility," says Fels. "We didn't want to have to overcome promises. ... And at this age, buyers aren't as likely to want to wait [for amenities]. They want to begin enjoying their community right away." In addition to having three restaurants open, Avatar had its fitness center, financial lounge, and other features in place before the first home was sold.

"Lifestyle is the way to nab these buyers," agrees William Slenker, president of Slenker Land Corp., in Burke, Va. Slenker builds active adult housing in the Mid-Atlantic market.

Swimming pools, golf courses, nature trails, and ponds haven't lost favor. But for new actives, add baseball diamonds and maybe even rock-climbing walls. Avatar hadn't planned on tennis courts in Solivita but added the amenity after its first group of buyers began asking for them.

Up-front costs may be the biggest barrier to market entry, according to experts. Slenker spent approximately $20,000 a unit on his upfront amenities, roughly 10 percent of the median $222,000, price for his 2,200 square-foot homes.

Avatar spent between $70 million and $80 million on infrastructure for Solivita, including a golf course, its three restaurants, walking paths, a theater, and a ballroom.

Robert Karen, president of K. Hovnanian's Southeast division, says the clubhouse, pool, furnishings, and amenities at Sonata Bay Club cost a little more than $1 million. The amenities were built first; the community's 300-plus units were built later. The community, in Bayville, N.J., had a build-out period of 42 months with an average return on investment of 13.21 percent.

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[BIG BUILDER Magazine, Initial publication date, April 2001]