One of the first places to evaluate a potential seniors housing project is a cost effective preliminary market study often called a 'high level' or 'state 1' study. This analysis determines the market depth for any planned project. How many assisted, independent living and memory care apartments will this project support? What rents can seniors afford and do they live nearby? Who are my competitors and what is their product offerings? Do market penetration rates support this project? Is senior population growth in the future favorable? The answers to these questions determine the initial feasibility of the project. A GO / NO GO conclusion is determined. This data is used to develop 'what if' financial scenarios. Meaningful dialogue with an architect & GC. Approach lenders and investors. Or just determine if this real estate location is suitable. This approach also applies to a hotel conversion to seniors housing.
As an operator, we understand the risk / reward of a new project.
Before committing substantive financial and human resources to a planned project an on-site comprehensive market feasibility analysis typically occurs. The analyst inspects and evaluates the competition. Interviews senior service providers and local officials. Assumptions are suggested for apartment types; unit mix, sizes, amenities and service offerings. Rental rate recommendations are suggested. On-site inspection of the market improves or may slightly modify the unit demand estimates from the preliminary study, if performed. The primary market area from which the majority of residents originate is confirmed. Primary and secondary research is utilized to enhance the reliability of specific conclusions and recommendations for this project. This detail is important for an architect to understand design elements for market differentiation and competitive advantage. From these choices a reliable proforma can be developed. A final GO / NO GO conclusion follows.
Many operators and developers seek to enter new territories and cities. A multi-site analysis applying GAP analysis principles can evaluate large metropolitan or geographical areas. The objective ascertains which zip code clusters exhibit the most demand for seniors housing. Avoiding over-built locales with meager seniors housing potential. This allows for real estate acquisition based on the better potential for one or more real estate parcels in a particular market.
As operators and developers of seniors housing communities, we understand the income and cost of operating a seniors housing community. Our proforma assistance can help determine the potential profitability and ROI of a planned project. Our seniors housing proforma detail is required by lenders when reviewing a loan package that typically includes a market feasibility study, the team developing / operating this project and proforma.