Senior Living Construction Costs Brief (Winter 2020)

February 19, 2020 / News Blog

This special issue brief was prepared for the American Seniors Housing Association (ASHA) by Larry Graeve and Amy Burk of The Weitz Company. For additional information, please contact:

Larry Graeve (larry.graeve@weitz.com or 515.286.4822)
Amy Burk (amy.burk@weitz.com or 515.286.4842)

The construction market remains steady, and the tariff issues have settled down for the time being. The labor shortage continues to be an issue, as it not only increases overall labor costs, but it also drives longer construction schedules. The increased labor costs are driven by annual hourly increases, overtime and labor risk. Prices continue to inch upward, although there are talks of a recession looming around the corner. The Construction Industry Confidence Index (CICI) rose slightly, up one point to a score of 52, but is still down significantly from the score of 73 just 24-months ago.

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: Raleigh, N.C. has an index of 84.5, which translates to a cost range of $142-$167 per SF for Independent Living, while Los Angeles has index of 111.7, which translates to a cost range of $188-$221 per SF for Independent Living. These indices coupled with local market conditions are essential when comparing overall pricing.