Glenn and Doris Kelly have been retirement junkies for years. Their how-to manual is heavily dog-eared, the page margins crammed with hundreds of footnotes highlighted in bright yellow. With each contribution to their 401(k), they believed they were making steady progress towards an idyllic, secure new life after retirement.
At Glenn’s 64th birthday celebration, they announced to family and friends that the day had come to put the so-called ‘master plan’ into action. “We felt we had been taking dance lessons all our working lives,” Doris says. “In a poetic sense, we were ready to go to the prom.”
Unfortunately, the Kellys’ timing could not have been worse. In order for them to purchase the home of their dreams, they would first have to sell the family home-no easy task in today’s real estate market. As time crept by, they wondered if they would have to put their retirement on hold until the market improved.
One rainy weekend, purely on a whim, they traveled to their first real estate trade show. Their dream retirement still revolved around a golf course trophy home complete with designer kitchen and killer landscaping, so they were not exactly searching for new ideas-but they found one nonetheless.
At the trade show, the Kellys were awakened to the brave, new world of condominium development. Worn-out stereotypes from the past were being eclipsed by upscale, updated, upsized prototypes nicknamed, not very subtly, ‘condomaxiums.’
“It is truly ironic how, after all those years of macro-managing every blessed detail of our retirement, we would find the promised land purely by accident. We literally stumbled onto a superior product, one that potentially could save our retirement,” Doris says.
After running the numbers, they were pleased to learn that a fully customized condomaxium at most any site of their choosing could be acquired for approximately 75% of what comparable quality would cost if, instead, you were buying free-standing custom.
So far, so good. But was there a downside? Any trade-offs? Would the Kellys get to keep any of the perks they had envisioned at that trophy dream house they no longer felt they could afford?
“Yes, absolutely yes,” Glenn says. “Condomaxiums confer impressive, cutting-edge living spaces complete with all the designer finishes and upgrades normally found in more expensive McMansions. Loads of resort-caliber amenities as well.”
“Condominium-style living never appealed to us as a primary residence,” Doris says. “We had enjoyed memorable condo-resort vacations in Mexico and Hawaii, but never associated those pleasant experiences with a well-defined concept of home. You might say we were a couple of condo snobs. Now, we may soon live in one for the rest of our lives!”
The lower price, smaller mortgage, lighter property taxes, utility bills and homeowner insurance premiums mean that the Kellys can proceed with retirement sooner rather than later. If they can find the right deal, they may be spared selling their current home until after the current down market has recovered and conditions are more in their favor.
Branding and Placemaking
Josie LaFontaine is a partner with the Scollard Group, acclaimed product development experts in Houston, TX who are marketing Grande Villas at Indian Beach, NC. She says retiring Baby Boomers like the Kellys are the leading edge of a robust market shift towards high-end condomaxiums as the new, preferred choice for primary home living.
“Boomers are famous for driving trends,” she says. “They’ve never been too keen about merely conforming to them.
“Retiring intellectually means everything to the Boomer,” she continues. “The condomaxium gives them the opportunity and the means to downsize square footage without sacrificing many of the perks and rewards that make the golden years so much more worth living. You need not over-spend or live too large to benefit from all the riches that come with the condomaxium lifestyle.”
LaFontaine points out that today’s high-end condomaxium owes its pedigree, its very DNA, to sophisticated branding that must be conceived and formulated well before architects draw the plans.
“We’re not just talking artsy marketing brochures, splashy sales centers or trendy décor in the entrance lobby,” says LaFontaine.
Her partner, Harold Green, puts things this way: “The success of any upscale condominium product depends entirely on how well a sense of place is first established and then sustained. The project must have a life after the final unit is sold.
“Placemaking is the ultimate expression of product development in the condominium world,” says Green. “If lifestyle only exists as a means to sell real estate, the project will turn out to be little more than just sticks-and-bricks and another failed condominium address.”
“Most of the time,” LaFontaine says, “even the sharpest real estate agent fails to perceive all the product development content that goes into a well-conceived, well-planned condominium complex. Buyers will often pick up on the subtlest nuances in tile work or hardwood flooring, but completely miss the major themes that ultimately determine a project’s failure or success.
“Even though the more existential aspects of branding are largely subliminal, they are, nevertheless, extremely critical,” she says. “Condomaxium lovers generally are very discriminating owners. When they buy and first move in, emphasis is entirely on the concrete. But, after living there for a while, owners begin to tune into the abstract virtues that make living there worth staying.”
Whenever the words ‘Boomer’ and ‘condo’ are used in the same paragraph, people usually think of resort destinations at the beach or a mountain lake. Lately, however, trend lines can be drawn in the direction of more urbanized ‘Boomertowns’ like Asheville, Savannah, Charlottesville or Charleston.
But statistics also signify another noteworthy trend: Baby Boomers are gravitating back to the same big cities they once fled to raise families out in the ‘burbs. The LoDo area in Denver, Midtown in Atlanta, and Penn Quarter in Washington, D.C., are a few prime examples of flourishing condo hot spots responsible for the renaissance in downtown urban living for the retirement crowd.
An explosion of downtown luxury condominium product in the nation’s capital threatens to outstrip an already strong demand. Irrational exuberance among condo developers may soon create the same unsold inventory ‘oversupply’ that plagues markets in San Diego, Miami, Atlanta and Las Vegas.
Lindsay Reishman is among several real estate brokers who could legitimately lay claim to the title ‘Condo King of D.C.’ “Internationally acclaimed architects and developers have created breathtaking world-class high-rises and boutique style complexes everywhere you look downtown,” Reishman says. “Some uber-trendy condo conversions have also brought renascent life to many of the city’s older, more classic structures.”
Reishman has experienced lots of strong demand from affluent Europeans, Asians and Latin Americans eager to exploit the currency exchange weakness of the U.S. dollar. He is seeing hordes of wealthy young professionals from Capitol Hill and K Street law firms express their conspicuously consumptive lifestyles through condomaxium ownership. This condomaxium boom is even revitalizing the more established, more traditional zip codes of Georgetown, Dupont Circle and Foggy Bottom. Upscale restaurants, cafés, fitness clubs, nightlife, galleries and even gourmet groceries have followed the money.
There are soft spots in this rapidly emerging market, Reishman warns. A number of condo conversions seriously underestimated the cost and scope of retrofitting infrastructure and now are over extended on their financing. Some new projects, planned during the 2005 boom, “confused brains with a bull market” and are suffering badly now that a bear market has become entrenched.
Escaping The ‘Burbs
Although selling condos is his livelihood, Reishman enjoys the ‘advisor’ aspect of his business, especially working with astute, soon-to-retire buyers like Henry Saltzman.
Saltzman, a 64-year-old trade association executive, left the city 30 years ago for greener pastures outside the Beltway.
“My two girls were infants, the new house gigantic, and the commute to work was a snap. Wild deer chewed our shrubbery,” remembers Saltzman, nostalgically. “Now, the girls have graduated college and the deer are long gone. Our two acres, once a veritable wilderness, is surrounded by the sprawl of the suburbopolis. The commute is worse than a root canal, even riding in a new BMW! The Promised Land has become a nightmare. We look forward to our farewell.”
The Saltzmans, says Reishman, own a beach house retreat several hours away on Delaware’s Atlantic shore. The original plan called for primary retirement at the ocean with a fashionable pied-a-terre in the city.
“My wife loves the museums and the sophisticated shopping. I’d like to stay close to my career network, maybe even do some consulting,” Saltzman says.
As their search wore on, the caliber and selection of condo product available in the Saltzmans’ price range began to change their minds.
“We came across a very smart mid-rise with incredible views near Logan Circle. The interior is right out of a magazine. It has secured parking and a private garden terrace,” Saltzman says.
The Saltzmans are excited at the prospect of being able to walk a few blocks for espresso, bagels, cocktails or gallery hopping. Issues like getting rid of existing furniture inventory and re-measuring closets to assure there will be adequate storage are all that stand in the way of making an offer to purchase. If their offer is accepted, they will be proud owners of a brand new “condomaxium” and with it, a new lifestyle that very likely will enrich their retirement years.
Life, for the Saltzmans, is about to get very good indeed.