Senior Housing Development First Steps
Go to any seminar on senior living development and one of the first things you hear is that you need a market study as one of the first steps in the decision making process.
While there are many keys to a successful project, you first need to determine if there is sufficient demand for the type of housing you are contemplating at rents that make the project financially viable.
The market study will be the cornerstone in your decision making process in the early stages of development. The market study together with preliminary construction and operating costs can be used as part of a financial model to determine the overall size of your project as well as units sizes number of each size and type etc.
This together with the help of a development consultant (Ecumen has served in this capacity in many instances) will provide information to be used in preparing a pro-forma analysis of the financial viability of your proposed development.
This would include construction cost estimates, operating cost assumptions and revenues (based on the rents band charges recommended in the market study) These preliminary steps will help your organization in the decision making process.
While there are some costs involved in the preliminary development process, the expenditure of these dollars is necessary in order to make certain that you do not head down a path with a project that will not work, the cost of which would pale by comparison.
There is no substitute for a good development team and adequate “spade work” in the development process.
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