A few years ago, we were preparing for an influx of multifamily developers and investors to flood into the seniors housing space, particularly in active adult, which was seen as an attractive add-on to their traditional multifamily portfolios with favorable demographic trends, higher (and more consistent) rents, good occupancy rates and longer lengths of stay. Active adult may have also acted as a gateway to other seniors housing sectors like independent living and assisted living for these investors.
Then, interest rates rose above average active adult cap rate between 4% and 5%, and development became more difficult, not to mention expensive. But as we (and others) have noted, the time to start building communities to get them open in time to welcome the first of the 80-year-old baby boomers is now. Plus, active adult communities are already attracting boomers in their 70s, 60s and sometimes 50s right now. So, we may start to see more multifamily investors enter the space again.
One of those is AOG Living, one of the leading fully-integrated, multifamily real estate investment, construction and property management firms in Texas. AOG engaged CBRE as its exclusive debt and equity advisor for its first two Class-A active adult development projects in the Lone Star State: Novum Capitol View (South Austin) and Novum Plano (North Dallas).
These transactions represent the launch of AOG’s active adult platform within the firm and its foray into the space. Aron Will and Tim Root secured two loans totaling more than $50 million from a regional bank. CBRE was also tasked with the equity placement for Novum Plano.
Novum Capitol will feature 124 one-bedroom and 44 two-bedroom apartment-style units abutting Goodnight Ranch, a 700-acre master-planned development in southeast Austin. There will be amenities like a saltwater pool, putting green, dog park, fitness center, wellness room, barbecue grills, among others.
Novum Plano will comprise 101 one-bedroom and 26 two-bedroom apartment-style units in the heart of Plano about one mile east of Legacy West and less than one mile south of Stonebriar Mall at The Bridges. It will have pickleball courts, a fitness center, resort-style swimming pool, park-like courtyard with grills, outdoor fire pit, dog park, and other amenities.
