ApartmentsBuild-to-RentSingle-Family Rental

Successful Age-Restricted Lifestyle Apartments Achieve Higher Rents

Jeff Kottmeier

October 25, 2016

In ten short years, from 2005 to 2015, the number of people turning 65 each year exploded from 2.2 million to 3.5 million. Many of these older Americans are increasingly choosing to rent. With this surge of older renters, developers are building age-restricted or so-called active-adult lifestyle apartments. These apartment communities are designed specifically for older renters and are commanding a significant premium for doing so.

First of all, why are older Americans choosing to rent?

Some prefer the flexibility that renting offers, especially when moving near their children and grandchildren or trying out urban living for a while. Less home maintenance also draws homeowners to a rental lifestyle. For others, a lack of sufficient savings for their elongated retirement will cause them to cash out on their current home and rent an apartment.¹

What makes a successful age-restricted lifestyle community?

Through our work across the US, we found that successful age-restricted lifestyle communities are based on three things:

  1. Proximity to residents’ favorite activities and key services

  2. Additional safety precautions and comfortable home designs

  3. A sense of community

The best communities have some of the following attributes:

How much more are rents in age-restricted apartments than market-rate apartments?

Interestingly, successful age-restricted lifestyle communities are able to charge a premium over market-rate communities. We found that age-restricted properties may achieve a 12% to 35% premium above market-rate apartments, depending on local market competition, property specification levels, and types/varieties of property amenities. However, it is important to note that age-restricted properties charging significantly higher premiums above market-rate units resulted in slower absorption paces. Additionally, operating costs could also be higher in lifestyle communities due to activity programming and more amenities to maintain.

We compared three successful age-restricted apartment communities to nearby market-rate apartments with similar building types and ages. The examples below are in suburban, walkable locations that bring the best of urban living to a more affordable suburban environment (what we like to call surban™).

Looking ahead, an aging population and the increasing propensity to rent result in demand for age-restricted properties. We believe that demand for age-restricted rentals will remain solid in the years to come.

Building Market Intelligence™

Every week, we deliver analysis to over 40,000 subscribers with our Building Market Intelligence™ newsletter. Subscribe to our weekly BMI newsletters to stay current on pressing topics in the housing industry.

About The Author

Jeff Kottmeier
Senior Vice President, Consulting
Jeff provides strategic insight and advice for housing throughout the Mid-Atlantic and Northeast with a special emphasis on rental housing.

Contact Us

If you have any questions about our services or if you would like to speak to one of our experts about we can help your business, please contact Client Relations at

Products and Services Mentioned

green check icon

Single-Family Rental Package

A comprehensive overview of the single-family rental industry’s major markets including forecasts, SFR market rankings, macro drivers, housing supply, demographic trends, and a look at Build-for-Rent.
green check icon

Real Estate Consulting

Our experienced team of consultants helps clients make sound housing investment decisions. We thrive on their success and work with many clients over multiple years and numerous projects.
green check icon

New Home Trends Institute

The New Home Trends Institute pairs design inspiration with exclusive insights into the “why” behind consumers’ housing choices. Gain exclusive insight into housing preferences and pain points through our monthly survey insights reports, webinars, and proprietary surveys of builders, architects, designers, and other industry professionals.

Latest Insights

Unlocking the Potential of Generative AI and Large Language Models for Your Business
Dear Consultant: How do we get more inventory so that the housing market has more slack?
Busting Gen Z Myths—What the Housing Industry Needs to Know