The American Senior Housing Association (ASHA) and leading national construction firm The Weitz Company have published the results of their bi-annual cost of construction Special Issue Brief for Senior Living Construction.
“We continue to see moderate inflation across the country and even the last markets to recover from the recession are seeing costs return to pre-recession levels,” says Larry Graeve, senior vice president – Senior Living, The Weitz Company.
The following table illustrates the latest trends for senior living construction costs per gross square foot.
Labor shortage a large factor in costs
The labor shortage continues to add pressure on construction costs. According to the Association of General Contractors of America, construction labor peaked at 7.5 million workers in 2007; today the US has an estimated 5.5 million workers. The average age of the construction employee is 54.
“Attracting enough skilled labor to the industry will be the challenge in coming years,” says Graeve. “Material price gains have been modest at a 1.4 percent annual rate. We anticipate the composite labor and material impact to be in the 3-4 percent range over the next 12 months.”
Costs are full burden and include general conditions, insurance, tax, bond and fee, but exclude site construction costs. The above costs are based on a city index of 100. Each city carries a different index, for example: Tulsa, OK has an index of 82.1, which translates to a cost range of $97-$115 per square foot for Independent Living. Chicago, IL has an Index of 117.6, which translates to a cost range of $139-$165 per square foot for Independent living. These indices coupled with local market conditions are essential when comparing overall pricing.
Mid-level costs generally include wood-framed with standard amenities and finishes, typically targeting the moderate income senior. High-level costs generally include steel or concrete construction with high-end finishes and luxury amenities, typically targeting the higher income senior.
About The Weitz Company
The Weitz Company is a full-service general contractor, design-builder and construction manager, and the largest national builder of senior living projects in the US. For more information about The Weitz Company, visit www.weitz.com.