Market Feasibility & Planning Proforma

MARKET FEASIBILITY STUDY

A market feasibility study for a proposed senior living facility.

Before committing large amounts of capital to a project or real estate, it is critically important to know if enough demand exists for new senior housing for independent living, assisted living, and memory care. All market feasibility studies are not created equal and have different uses. The studies are used for new facilities under consideration, additions to existing communities, for hotel conversions to seniors housing, for acquisitions, and for struggling senior housing facilities seeking improvement initiates.

Preliminary Market Study: Often called a stage 1 study, this early stage analysis determines:

  • How many units are in-demand for IL, AL and MC?
  • What monthly rents can seniors afford based on demand
  • Who are my competitors and what services are offered?
  • Is the market penetration rate acceptable  for the project?
  • Are there planned projects nearby?
  • Results discussed with architects, lenders, investors
  • A preliminary proforma can be developed

Comprehensive Market Feasibility Study: An on-site analysis to include interviews with local senior service providers, business sources, realtors. In addition to information obtained in the preliminary market study, the following is determined.

  • Competitors
    • Occupancy / vacancy levels
    • Services, amenities and programs
    • Unit types, sizes and mix (studio, 1BR, 2 BR)
    • Rental rates and extra fees charged
    • Facility condition / sales personnel capability
    • How viable is this competitor?
  • Confirm
    • Areas where most residents will originate
    • Type, size, apartment rents residents seek
  • Market conditions
    • Are senior populations increasing?
    • Are household incomes forecast to grow?
  • Verify no similar projects are being considered nearby
  • Offer a professional opinion as to overall viability of the project.
  • Recommend numbers of IL & AL units; studio and 1-BR units
  • Recommend rental rates
  • Suggest market strategy

PROFORMA – FINANCIAL FORECAST

A proforma financial study for a planned assisted living facility.

Using intrinsic market study information, a 5-year proforma estimates possible financial performance of the planned project. As an experienced developer, general contractor, and operator of senior housing communities we know the cost to build, staff, pre-lease and operate a facility. We can mitigate risk and accentuate market differentiation to create a competitive advantage for clients. 

Armed with a market study and proforma, meaningful cost and designs can be developed by architects. Then these components can be submitted to lenders or investors. As an experienced developer and operator, lenders can be confident about the successful development and management of your planned project.