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The Next Boom: Apartments Built For Baby Boomers May Follow Those Tailored To Millennials

The Mecklenburg Times - Dec. 27, 2013 - Multifamily developers over the past few years have gotten up close and personal with the millennial generation, studying their wants and needs, and catering to those preferences. The result of that intense attention in Charlotte is thousands of apartments under construction or recently finished, replete with the amenities craved by the younger generation: large pool areas with cabanas or fire pits for socialization, lawn games, cinemas, and dog parks.

With so many units built with that demographic in mind, it won't be long until supply and demand meet in equilibrium and apartments for the millennials won't be
as profitable as they have been. But, fortunately for developers, the baby boomers are waiting and they are desperately in need of rental units.

''It's incredible how many empty-nesters and people that are 50 or older are becoming renters," said Charles Lindsey McAlpine, managing partner of Southern Apartment Group, a Charlotte-based multifamily development company. "They are the least-serviced market in the Carolinas. I can't think of another demographic that is less serviced than that group."

Unlike older generations of the past, who traditionally have stayed in the houses they own until moving into an assisted-care situation, baby boomers are renting for some of the same reasons as  younger generations.

They want to be close to urban areas, public transportation and restaurants. They want to be able to walk to their destinations.

And they have the numbers to justify those wants to developers.

Rental demand rises
According to the American Community Survey, organized by the Census Bureau, Mecklenburg County in 2012 had 264,878 people between the ages of 45 and 74. That group made up 28.6 percent of the county's population. By comparison, millennials of renting age accounted for about 23.7 percent of the total county population. And, if the recent trend in people 50 and older renting continues, the market won't be shrinking. People aged 35-44 account for 15.8 percent of the population, the survey says. And despite the numbers indicating a huge market for this type of housing, it doesn't appear that anyone has made the leap to develop such apartments specifically for boomers in Charlotte.

"I don't know anybody that's doing it," McAlpine said. "A lot of developers are nervous; they feel they may be getting into territory they don't know as well."

Charles Dalton, president of Charlotte-based Real Data, an apartment market analytics firm, said the millennial market may not be as strong for much longer.

"They've been looking at those people getting out of college, and there's been a big surge of that group over the last several years, which has helped the apartment market," Dalton said. "Those people are almost always renting before they're buying at that age. But that group is leveling off over the next few years.

"They're next, baby boomers. There's going to be a surge of that age group. (Builders) will start looking at amenities that will be attractive to that target market."

Catering to boomers
Since it hasn't been tested in the Charlotte market, McAlpine said developers, himself included- aren't sure exactly what amenities will attract boomers.

There is consensus that Boomers want to be within walking distance of shops and restaurants, and want to be near things like green ways, to accommodate their active lifestyles. Beyond that, it's not as clear.

"I might want to have a slightly larger unit," Fields said, referring to the millennial preference for small apartments. The boomers are likely to have more possessions
such as a china collection than the younger generation and will need more storage space,  he said.

McAlpine said he thinks it won't be long until someone develops an apartment project catering to the boomers.

"An apartment complex that would have a cooking class is very different than one that would have a tanning bed or a happening pool," he said. "The mix of shops is important. A wine shop may be more interesting than a late-night bar. They'll probably want upper-end restaurants nearby.

"I hope that there are more developers that will look at it. If we found the right site or the right management company that could run it for us, we would definitely do it."

Shayla Odum