Q. How do I evaluate the appropriate primary market area definition for a specific site location or community?

A.  The primary market area, or PMA, for a senior living community should represent the area from which a community likely will draw the majority of its residents.

Traditionally, the PMA has been defined as a radius around a site location – many have erroneously assumed a one-size-fits-all approach. Actual PMAs often are irregularly shaped and represent different sizes with respect to overall population and geography. A defined PMA in a densely populated urban area typically will be much smaller than in a low-density rural area.

Consideration for the PMA definition should include drive times, natural and man-made barriers, psychologic boundaries and potential affiliations with relatives or affinity groups. For ease of access to or acquisition of demographic data, PMAs typically are defined using discrete political subdivisions such as cities, counties, ZIP codes, census tracts or other geographic considerations.

Existing senior living communities have a wealth of information at their disposal if they have properly recorded the background on their residents. Analyzing the ZIP codes that their current existing residents actually came from can allow an operator to compare the assumed PMA (prior to opening) with the actual PMA being served. This information can assist with future target marketing and communication activities.

Accurately defining and understanding the PMA is critical to assessing the potential demand and success of any new senior housing community or healthcare facility.