Building on recent achievements, the nation’s leading active adult community operator is poised for substantial growth and innovation in the field.
Greystar, headquartered in Charleston, South Carolina, is a multifaceted entity involved in multifamily and senior housing operations, development, and construction. With a robust presence in 110 communities across 28 states and 90 markets, Greystar also claims the title of the largest multifamily apartment operator in the United States.
Looking ahead, Greystar is set to make significant strides in the active adult sector in 2024, as indicated by Michael Levine, Senior Managing Director of Real Estate for Active Adult.
We have pieces in place to grow a lot more, and to be able to handle a lot more without faltering at all,” said Levine for Senior Housing News. “Potentially, we are looking at moving into three to four more states in 2024.”
Fueling this impressive growth is the unique aspect that Greystar’s communities have defied the industry’s age trends. Contrary to initial concerns, the average age within Greystar’s communities has, in fact, decreased over the past few years. This shift reflects a notably younger demographic compared to the typical residents found in traditional senior living communities in 2023.
Greystar’s portfolio encompasses three in-house brands, namely Overture and Everleigh catering to the high-end segment, and Album designed for the middle-market. In addition, they manage numerous local brands on behalf of other entities. Levine attributes their success in maintaining a youthful demographic to their commitment to creating communities centered around enjoyment and leisure. A distinctive feature contributing to this is their deliberate choice of not offering in-house dining options.
“To me, ‘active’ is not just that someone is physically exerting themselves or is able to do something,” Levine added. “It’s mind, body and soul. And that’s really what we’re focused on.”
Creating Active Communities
Greystar’s expansion strategy aligns with the evolving preferences of older adults, who increasingly seek active adult communities that resonate with their desired lifestyles. For the incoming baby boomer generation, vibrancy and enjoyment take precedence over clinical care needs.
While Greystar’s offerings vary across brands and communities, they all share a common goal: to distinguish themselves from the broader senior living landscape. A typical new Greystar community boasts flexible spaces like clubhouses and communal areas, residences featuring balconies and modern layouts, as well as ample room for exercise and outdoor pursuits.
Crucially, Greystar invests substantial time and resources in local market research to ascertain the specific amenities and features residents desire. This commitment ensures that each community caters precisely to the preferences and needs of its residents.
“Our goal is to be aspirational, meaning people at retirement age who are looking for their next steps in life,” Levine said. “Our amenity packages vary quite differently based on different regions or states.”
Greystar’s approach stands out as it refrains from resource-intensive services such as in-house dining or healthcare, allowing the company to maintain lean staffing levels. In a typical 165-unit community, Greystar employs merely six to seven staff members, ensuring minimal overhead expenses.
Levine points out that staffing tends to be a stumbling block for many active adult providers, particularly when communities offer in-house dining services. Additionally, he observes that some operators offer units that are smaller than what’s ideal for residents.
“People are looking for larger units because they’re moving from a four- or five-bedroom house and they’re downsizing,” he added.
Greystar’s strategy has delivered remarkable results, boasting an average lease renewal rate of approximately 75% among residents. Most residents stay for an average of three to five years.
Significantly, the company has achieved an average resident age of just under 72 years, marking a decline from an average age of nearly 74 years nearly six years ago.
Levine brings a wealth of experience in senior living to his role. Prior to joining Greystar in 2017, he held various positions at Chelsea Senior Living. Before that, he served as a regional manager for Sunrise Senior Living.
One common concern within the traditional senior living industry is the potential for active adult communities to experience “acuity creep” as residents age. In fact, Levine admits that this was also his “biggest fear” as recently as six years ago.
Based on his prior involvement in independent living, Levine highlights a significant distinction at Greystar. The company typically avoids enlisting external service partners to support residents as they age in place. This approach contrasts with some other active adult providers who are building models centered around combining active adult residences with healthcare services.
“While we want people to age in place — and some people bring in a caregiver or bring in extra help — the reality is that we are a specific type of environment,” Levine said.
Levine observes a surge in companies entering the active adult space, even from the more conventional senior living sector. However, he underscores the importance of recognizing that active adult living demands a unique and specialized approach. It fundamentally differs from both senior living and multifamily housing, necessitating a dedicated and seasoned team for effective management.
He emphasized, “Active adult communities should remain faithful to their name, allowing for various adaptations. Nevertheless, they should not merely be defined by age restrictions.”
Explosive Growth Expected Soon
In the face of development and construction challenges, Greystar remains steadfast in its growth trajectory for 2024, as per Levine. Despite the hurdles, the company continues its proactive approach in developing and constructing its own communities while collaborating with developers on third-party management ventures. An exemplar of this is the partnership with Headwaters Group, set to create middle-market active adult communities managed by Greystar. Notably, approximately 40% of Greystar’s communities are now under third-party leases.
While site selection has become more demanding this year, Greystar’s development teams nationwide persist in identifying viable opportunities to advance their projects.
While the current year has presented heightened challenges in site selection, Greystar’s development teams, spanning the nation, continue to identify and secure promising opportunities.
As Levine hinted, the company’s expansion efforts are directed towards new states, with a particular focus on the Midwest, including states like Missouri and Indiana. Additionally, Greystar aims to reinforce its presence in the Pacific Northwest and Northeast, regions where it already operates, with three new projects scheduled to commence in 2024.
Facilitating Greystar’s growth aspirations is its affiliation with a larger corporate entity, providing access to substantial resources in IT, legal, and development. This broader company context also opens doors for innovations, potentially benefiting the active adult sector, including the exploration of modular construction techniques for future projects.
“I don’t think [modular construction] is in any of our next builds, but, for our following generation, that’s something we’re looking into,” Levine added.
In the past year, the active adult sector has witnessed a surge in new entrants, with Greystar facing increased competition. Levine acknowledges that numerous projects are being evaluated, and sites are being secured for future active adult developments, signifying the sector’s growing momentum.
He remarks, ‘We are beginning to observe the imminent explosion of this market.’
Despite the intensifying competition, Levine is confident that Greystar’s scale and expertise set it apart. He anticipates the company not only maintaining its prominent position in the active adult sector but also expanding its presence even further.
“We will have some significant expansion over the next 12 to 18 months,” he said.