FAQs
- At what point in the development process should I get a market study?
- When is the best time to start marketing?
- The terminology for different types of senior housing and care is confusing. How can I know I am talking about the same thing as the local planner or my lender?
- How can I predict how long it will take for my project to lease-up?
- In building homes to sell to active adults, can smaller in-fill projects compete with large senior campuses and “Sun City”-type projects?
- What is the value of direct consumer input in the early planning stage?
- What are the most important criteria I should consider in looking for a good site for a new assisted living residence?
- What are the most significant trends that will affect senior housing in the next five years?
1. At what point in the development process should I get a market study?
A preliminary market analsis or “Quick Look” report very early in the process will help you identify the best market opportunities for a particular site. Perhaps there is a stronger market for independent living and you had thought the market for assisted living was stronger. After the project is well defined, a formal study can be completed to satisfy lender requirements.
2. When is the best time to start marketing?
The time to start marketing is when the project is first conceived. It is critical to establish, as early as possible, exactly how your community will be positioned in relation to competition, including unit mix, pricing, finish, and services. Then, each step in the planning process can incorporate an effective marketing component such as town meetings, direct mail, focus groups, or presentations to local 55+ groups.
3. The terminology for different types of senior housing and care is confusing. How can I know I am talking about the same thing as the local planner or my lender?
Several key national organizations addressed this issue in 2003 by working together to create standardized terminology and definitions for senior housing. These classifications can be viewed in the document “Classifications for Seniors Housing Property Types.” Still, pay close attention to individual definitions used by some lenders, such as HUD.
4. How can I predict how long it will take for my project to lease-up?
When we estimate absorption for clients, we believe it is important to weigh many factors. First, we examine the lease-up history of the most recent comparable properties in the market area. Then, we look at the strengths and weaknesses of your project against these competitors (e.g., location, competitive pricing, reputation, national identity, quality of marketing campaign) and adjust up or down for each factor that we believe will affect the velocity of your lease-up.
5. In building homes to sell to active adults, can smaller in-fill projects compete with large senior campuses and “Sun City”-type projects?
In-fill projects are often highly desirable because they are located within established communities that are already “home” to active adult buyers. Very large developments are typically located on the farthest edge of suburban building. A large portion of demand will be from those who want to stay in the center of things and be able to walk to their favorite restaurant, theater, or shopping.
6. What is the value of direct consumer input in the early planning stage?
Preliminary market research that quantifies probable demand in a certain market is an important first step. Targeted mail or online surveys, focus groups, and meeting with local senior groups, however, can help you design a project that is the best possible match with the needs and preferences of prospective customers. As Peter Drucker said, “The aim of marketing is to understand the customer so well that the product or services fits him (her) and sells itself.”
7. What are the most important criteria I should consider in looking for a good site for a new assisted living residence?
Strike a balance between aspects of a site that make it more visible and accessible and aspects of a site that make it beautiful, peaceful and residential. Prospective residents are drawn to a setting that has convenient driving access and nearby shopping and services. They want it to be easy for their children to drop by. Also, the marketing benefit of a property that has signage and visibility from a nearby busy street is huge. At the same time, the project will be more desirable if it has a residential look and feel, includes gracious grounds or is adjacent to premium natural features, such as a park or a lake.
8. What are the most significant trends that will affect senior housing in the next five years?
Watch for shrinkage in the market for traditional, independent living apartment communities; more senior apartments with few included services, higher acuity in assisted living residences; a new generation of nursing homes designed in residential and smaller settings (e.g. “Eden alternatives,” “Greenhouses”); niche or affinity housing (e.g., retired professors, gay and lesbian); 55-plus co-housing communities; more types of active adult patio home and condominium communities; and huge growth in businesses offering comprehensive in-home services, home remodeling, and wellness or anti-aging services and products.
As a lender, I know that I can rely on The Highland Group’s conclusions and recommendations in creating a project that will enjoy long-term success. 