By Steve Moran
This is the first article I have ever written on the active living segment of senior living. I have been thinking and reading about this category for months. There was a lot of talk about Active Living at NIC 2021 Fall Conference, which spurred the writing of this article.
It seems to be moving into the category that Memory Care occupied 7-9 years ago, as the “can’t miss” new product for today. There is a sense that the demand is significant, maybe close to limitless.
I have really struggled to figure out what my reticence toward this category was all about until it came to me in the middle of the night last night. Here is what rubs me the wrong way.
It is essentially a high-service apartment building that discriminates against people younger than age 55 and this intuitively makes no sense to me. Particularly since we see ourselves as champions in the fight against ageism, which we define as discrimination against older people; but if we are more precis,e it is actually discrimination against any age group.
The Case for Active 55
The case for Active 55 is simple and obvious and owners-operators-developers are building and filling them up. But there are other benefits:
- Readily available capital
- Substantially lower operating costs
- Staffing is much, much easier
- The average age at move-in is substantially lower
- It is likely that as Active 55 becomes more prevalent it will reduce the stigma that comes with living in senior living.
As senior living operators are looking at the Active 55 group, one of the things I really appreciate is that figuring out exactly what amenities will be offered is very localized, as opposed to more traditional IL, AL, MC, where the offerings tend toward mind-numbing same old same old.
Here are the risks and they are not inconsequential:
- There is no really good data on how deep the market is. At one time, the prevalent thinking on memory care was that it was near impossible to build too many communities. We now, of course, know this is not true.
- What happens as these young older people age and have more needs? Will they become the new assisted living?
- As the population ages, will it decrease the appeal to younger residents?
- Will these communities ultimately cannibalize existing IL, AL products?
A number of operators are thinking about these risks and designing their buildings in a fashion that would allow them to be converted to traditional AL if the demand changes.
What are your thoughts?