Seniors Want to Live in Urban, Mixed-Use Housing

Much of the discussion around the changing commercial real estate landscape often focuses on what millennials want. However, the country's 74 million baby boomers are driving changes to the market with their own needs and interests, too.

Today's boomers are flipping the common perception of retirement on its head. The cookie-cutter "old age home" out in the leafy suburbs where you might have visited your grandparents is becoming a relic of the past.

Today, a new form of mixed-use senior housing is taking shape. These residents, who are around the ages of 55-75, are active and desire urban centers where they can live and play, entertain family and friends, and socialize—both in and out of their homes.

In fact, the needs of these seniors don't seem all that different from those of their younger counterparts. Here are some of the driving forces behind this change, and how 55+ communities can meet the needs of these residents.

Seniors Staying in the Workforce

Today's boomer generation is more active and plugged in than ever, partly due to changing conceptions about age and retirement. According to a Pew Research study, 29% of boomers are still active in the workforce and plan to continue working into their 70s, compared to only 21% of the preceding Silent Generation at the same age.

Many continue to work for retirement savings, but also because they are just as entrepreneurial as their younger cohorts. An interest in the gig economy, both as a way to bring in extra income and stay socially engaged, is another push behind the exodus from the suburbs and move to more urban areas close to public transportation and activities.

Better Amenities and Social Activities

Baron Christopher Hanson, lead strategist and principal at RedBaron Advisors, a Charleston, S.C.-based advisory firm, cites a few key amenities that are important to tenants looking for mixed-use senior housing communities.

Entertaining and socialization are big factors. "Retirees and 55+ want their kids and grandchildren to visit more often. They do not want to sit and wait for them to just come home for Christmas once a year," Hanson says. "And, if family is far away, active seniors want to socialize, get out more, walk to church, go get a slice of pizza, or attend happy hour more often."

Recent developments in metro areas around Chicago, Boston, and Seattle include community amenities ranging from restaurants and theater rooms to art studios and workout spaces. Most boomers are well versed in technology, so smart home features, both for convenience and safety—including health trackers, help buttons, and fall prevention devices—are common in new builds.

Another key factor for tapping into the benefits of more urban areas is access to healthcare.

Hanson says, "Due to the rise in smaller urgent care and 'micro-retail' doctors' offices vs. giant hospital campuses 20-30 minutes away on highway exits, the fear of being too far from medical care is a major selling point."

Opportunities and Considerations for Investors and Developers

One potentially overlooked consideration that Hanson cites for developers and investors who are thinking about building mixed-use senior housing is local government cooperation.

"The politics of land vary from town to town, neighborhood to neighborhood, and state to state," Hanson says. "[However], active senior living and 55+ is now an attractive project for both sides of the community."

Hanson cites Charleston, S.C., as a good example. It's a coastal city with limited available space but is also an attractive retirement destination. The developers and investors who tap into the pulse of the market and propose buildings that satisfy not only the local government regulations but also the interests of the key boomer voting block are getting approvals to develop housing that fits the needs of the community.

As boomers continue to make their voices heard and advance closer to their retirement years, the need for housing that answers to their demands will continue to take shape. It's an opportunity developers and investors can continue to explore.