Materials are the biggest cost category associated with construction of a senior living community, with labor coming in a close second, according to new data from The Weitz Co.
The Des Moines, IA-headquartered architectural / engineering / construction firm crunched the numbers from the more than $3 billion in senior living community projects it has built over the past 50 years, which total 365 communities and 31,000 units, to uncover specific percentages.
Materials accounted for 43% of costs, and labor accounted for 40%. “They are the most critical components to constructing a project, and that is unlikely to change anytime soon,” according to the company, which said it wasn’t surprised by the finding.
Equipment represented the next highest share of project costs, at 8%, and general conditions (site management, material handling and project management) represented 5%.
“General conditions, which can ensure that a project is properly staffed to be delivered on time and on budget, can drive the rest of the costs of a project,” Weitz said. “Cutting the middlemen out of procurement and enabling general contractors to procure materials on their own might push general conditions above its 5% average. But doing so will trim costs from the overall budget and can generate better value for the customer.”
Pre-construction costs were the smallest type associated with construction of a senior living community, at 0.5%, but Weitz said that preconstruction “can add tremendous value to a project” and “can save you millions of dollars down the line.”
Other types of costs on the list included overhead, profit, bonding, and insurance. See the graphic for additional information.
The percentages are variable and averages within a range, Weitz cautioned.
