Land Cost per Unit for Senior Housing
A question often proposed by senior housing developers is, “How much should I pay for the land?” Like all things real estate related, that depends! Land costs have certainly plummeted in the past few years after the housing market bubble burst and the ensuing recession began. However, a good site will not necessarily be discounted as many sellers are holding their assets until the market rebounds.
Here in the Twin Cities Metro Area, Maxfield Research Inc. has found land pricing has generally ranged from about $12,000 to $15,000 per unit, with some projects on highly desirable sites commanding upwards of $18,000 per unit. Of course land costs per unit will decrease with increased densities and economies of scale. Like all real estate, land costs will vary from community to community and will be determined by a number of factors, including: land availability/supply, demand, land use controls, infrastructure improvements, taxing jurisdictions, raw vs. platted, etc.
However, regardless of location or community, a project’s land costs (raw land plus improvements) should range from about 10% to 15% of the total development costs.
0 Comments
Name and email are required. We promise not to share your email address with anyone.