Q. Do I need to perform a market study?
A. Yes, if you want to make data-driven due diligence decisions regarding the feasibility of a new senior living development or the evaluation of an existing community.
If you are trying to determine the overall viability of a new to-be-developed senior living project or continued success of an existing community, then getting a market study is one of the first things you will want to do. A good market study will assist in a thorough understanding of the market area and should provide the following useful information:
- Definition of the area from which you will draw residents,
- A demographic and economic/affordability analysis,
- A detailed evaluation of the existing and planned senior housing competition,
- Estimates of demand for each living arrangement and
- Definition of the project characteristics, including the size of the project, unit mix and sizes, pricing, resident services, amenities and features.
The market study can support go/no-go decisions regarding project development, facilitate the participation of other partners in the project and assist in securing financing.
It will provide information for existing operators that are dealing with ongoing economic uncertainty and that are considering important financial and operational changes at their communities. The market study can confirm continued future demand, obtain and compare information on area senior housing competitors and influence strategic planning for the continued success of communities. Strategic planning at existing communities has resulted in changes to the mix of living arrangements, adjustments to pricing, tweaking of service packages, the addition of new units and overall repositioning in the market area.
We’re at the beginning of 2023, so now may be the time for a new market study or an update to an existing mature market study. It is a useful tool that will be used by all members of the senior housing team, including operations, management, design, architectural and marketing team members.
Although it is not the only tool, it is an important first step that will provide necessary and critical market intelligence that will assist in mitigating risk during the overall planning process and increase chances of future success.
Lynne Moore is president of MDS Research Company, a national senior living and healthcare consulting firm based in Fort Worth, TX, that has been serving clients for more than 50 years. MDS is a two-generation company — she is following in Jim Moore’s footsteps. Ms. Moore is responsible for all MDS market research-related projects involving all aspects of senior housing and healthcare. She can be reached at (817) 731-4266 or [email protected].
This column appeared as “You’ve Got Questions, We’ve Got Answers” in the February 2023 print issue of McKnight’s Senior Living magazine.
The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.
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