Senior Living Construction Costs Brief (Summer 2018)
This special issue brief was prepared for the American Seniors Housing Association (ASHA) by Amy Burk of The Weitz Company. For additional information, please contact:
The labor shortage continues to be an issue in most markets with an aging workforce and fewer young people joining the trades. This trend is not likely to subside anytime soon. There have also been significant increases in material pricing on oil-based products, lumber, PVC and gypsum. These increases, coupled with the new tariffs, will impact the overall escalation rates on future projects. The numbers are derived from completed projects and do not account for new tariffs or HOT markets. Thus, we suggest additional dollars be carried to cover tariff risk in the 2-4 percent range. If you are building in a busy market, then adjust the costs 5-10 percent to accommodate for tight labor.
*Costs are full burden and include general conditions, insurance, tax, bond and fee, but do not include site costs. The above costs are based on a city index of 100. Each city carries a different index. For example, Nashville, Tenn., has an index of 85.8, which translates to a cost range of $126 to $158 per square foot for Independent Living, and Chicago has an index of 120.5, which translates to a cost range of $177 to $222 per square foot for independent living. These indices, coupled with local market conditions, are essential when comparing overall pricing.