Costs associated with developing senior living communities likely will increase again next year, albeit modestly, despite the decline in construction starts and less competition in the industry for sites, labor and materials, according to CBRE.
The primary drivers of the increases will continue to be labor and materials, the commercial real estate services and investment firm said in its “U.S. Seniors Housing Development Costs Report” for December.
Pressure related to labor costs will exist because construction levels in other sectors, especially multifamily housing, are expected to remain high, the report authors wrote. “Material costs will also continue to climb, especially if trade tariffs remain,” they said.
The total cost for a senior living development in 2018 increased by 5.3% year-over-year, CBRE said.
The report may be downloaded from CBRE’s website.