[easy_sign_up title=”Your Title Here” phone=”1″ fnln=”1″ esu_label=”A unique identifier for your form” esu_class=”your-class-here”]
The impact of the Baby Boomers on the apartment sector was a common theme during this week’s NMHC Annual Meeting.
Hessam Nadji, Senior Vice President / Chief Strategy Officer at Marcus & Millichap, shared anecdotal reports that fully 30-35 percent of the new construction is being absorbed by empty nesters.
NMHC research shows that 60 percent of the growth in renter households will be people over 55. Noted gerontologist and best-selling author Dr. Ken Dychtwald provocatively asked, “Is that where 60 percent of your attention and creativity is going?”
Toby Bozzuto, President of The Bozzuto Group, explained that they are targeting Boomers, but they don’t assume that Boomers and Millennials will want different properties. “Boomers may want to feel younger and the Millennials may want to feel like they have arrived.”
“We found through our research that the market is absolutely there and they are downsizing,” said Ricardo Rivas, CIO of Allied Orion Group, one of just many firms reporting that they are adapting penthouse units for Boomers.
Few are considering Boomer-specific properties, and capital is hesitant to back those kinds of projects. Instead, they are mixing the generations, largely with success.
Allina Boohoff, Executive Director with J.P. Morgan Asset Management, warned that the cohabitation is not without friction.“It’s a very difficult thing to do well,” she noted.
“Almost everything we know about old people is yesterday’s old people,” warned Dychtwald. “If you build housing for the last generation of old people, you’re probably missing the mark.”
At a special session for the Executive Committee, Dychtwald identified four converging forces that explain why.
- Increasing longevity and extended youthfulness. Fully two-thirds of the people who have ever lived past 65 are alive today, and the idea of 20 years of retirement is unattractive to most of them.
- Demography is Destiny. During the baby boom, 92 percent of women who could have children did. The resulting 75 million baby boomers changed the nation as they migrated across the lifeline.
- New paradigm for work, leisure and learning. Faced with a longevity bonus, most Boomers don’t want to just add more years to the “old” category. Half of today’s retirees are thinking about going back to work.
- Re-visioning Retirement. Boomers don’t want to grow old the way their parents did. They want to reinvent themselves, learn new things. And they want freedom to do what they want to do on their own terms.
Echoing another key theme at the meeting, the return to urbanization, Dychtwald suggested that we could see the most extraordinary reverse migration we’ve ever seen as Boomers react to their empty nester status.
“Capitalize on the longevity marketplace,” urged Dychtwald. “It’s worth understanding the hearts and minds of these Boomers as they age,” especially when you consider that people over 50 have 70 percent of America’s worth.