Senior Housing Market Feasibility Studies - Continued...

The very first question we get asked is, "what does a market feasibility study cost to produce?"

The answer is a range of costs from approximately $10,000 to $15,000.  The variance is created as a result of our conducting a head count of all the facilities in the project site's geographical primary marketing area that must be canvassed.  Field time is our single biggest report expense line item.  As the number of "comps" increases, so does the amount of time increase to properly survey all of the directly competitive facilities.  Once we know what that number in fact is, we issue a contract proposal that locks in a flat fee cost for the client.

There is also a related issue in that some market feasibility studies are "full-scope" versus "directed use".  A full-scope market feasibility analysis involves a pain-staking market analysis of all major commercial real estate property groups - not just senior housing (click here and see what one looks like).  The results are ranked based upon the gross income streams each property class is likely to produce over a defined period (called the "forecast period").  This runs up the tab because of the amount of work involved and the detailed reporting required.  A full-scope market analysis may entail over 200 pages of reporting data while a directed use report is 50 to 100 pages.  The directed use approach is where the client pre-determines what they are interested in pursuing (such as the development of a senior housing project).

To find out more, contact a Rainmaker consultant today and get all the facts.