It is as simple as an aging population?
What is driving demand for assisted living facilities? There is more to it than meets the eye. When conducting assisted living feasibility studies nationwide, our observations have included the following items:
One word can sum it up: demographics. Census data reveals that the number of Americans aged 65 and older reached a staggering 55.8 million in 2020, making up 16.8% of the nation's population. This surge in the aging population is the primary driver behind the increased demand for senior housing.
The NIC MAP monitors 31 major metropolitan areas; of those 31, the top three cities with the highest occupancy rates in Q2 2023 were Boston, where the average occupancy was 89.0%, followed by Baltimore at 87.5%, and Portland, Oregon at 86.9%. On the other hand, the cities with the lowest current occupancy levels were Houston at 78.7%, Cleveland at 80.8%, and Atlanta at 80.9%.
With the demand for senior housing units steadily on the rise, around 25,000 to 40,000 additional housing units will be required annually from now until 2030 to accommodate the increasing demand as the Baby Boomer generation continues to age. This clearly indicates that senior housing is fast becoming a thriving sector in the real estate industry.
Industry Performance
The National Investment Center for Senior Housing & Care report’s findings emphasize that the sector is poised for continued expansion. In order to meet the growing demand, it is estimated that more than 800,000 additional units of senior housing will need to be added in the U.S. by 2030. As the aging population continues to swell, the senior housing market presents a unique opportunity for investors, developers, and operators to contribute to the well-being and quality of life of older adults while enjoying the benefits of a thriving market.
Assisted Living Facility Feasibility Study
Lenders demand feasibility studies for assisted living despite the rapid industry growth because of increasing operating costs, scarcity of trained and trainable labor in the sector, increasing competition and dominance of a few larger national operators.
In the assisted living facility feasibility study critical factors include forecasting these factors and developing a financial pro forma that is well-supported and can provide for a financially feasible project under stress by reducing rents, which although in most markets have seen steady increases, the increases have also reduced affordability, thus being an internal threat to operations.
The SBA Feasibility Study is popular for assisted living facilities because the SBA is an option for financing. The SBA Feasibility Study requires substantial research into the competitive market and demand drivers for assisted living facilities that are of new construction, being repositioned or expanded.
Publisher Details: Assisted Living Feasibility Study. SBA Feasibility Study Consultants: USDA Feasibility Study Consultants: Feasibility-Study.comhttps://www.feasibility-study.com/
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