Senior living development costs average $283 per square foot: report

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Senior living development costs average $283 per square foot: report
Senior living development costs average $283 per square foot: report

Senior living development costs are averaging $256,000 per unit, or $283 per square foot, according to a new report from commercial real estate services and investment firm CBRE.

Figures in the “U.S. Seniors Housing Development Costs Report” are based on CBRE valuations of more than 1,500 stand-alone or combination independent living, assisted living and memory care communities this year, including 250 properties that were proposed developments, the company said.

The breakdown is as follows:

  • 62% to 68%: Hard costs — site work, foundation, building shell construction, roofing, interior finishes, landscaping, signage and labor.
  • 21.5%: Soft costs — inspection fees, construction loan-related costs, architectural and design costs, project management and other carrying costs during construction and lease-up.
  • 11%: site acquisition costs.
  • 3.4%: furniture, fixtures and equipment.

The totals add up to more than 100% because of rounding.

Returns on costs, when measured as stabilized net operating income as a percentage of overall development costs, ranged from 7.8% to 10.1%, according to CBRE.

For more details, the report can be downloaded here.

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