.

It’s incredible to see the advances in treatment available in memory care facilities.  I’ve seen a number of names for these in our over twenty year history of constructing these care centers  including Alzheimers’ care, dementia care, and now memory care, but the advances in both amenities and care are striking.  Seemingly gone are the days of highly mobile, somewhat confused residents wandering (or running) about.  I’ve had the pleasure of touring a couple of facilities with Jonathan Moyer, President of Harbor Senior Concepts in Madison, Wisconsin who specializes in these types of facilities, and we are now seeing industry-wide trends toward improving mental stimulation and creating peaceful surroundings.  Some of the physical improvements include outdoor fenced walking paths, porches with exterior finishes as part of the interior finishes, wardrobe and stage areas which allow for patients to dress up and relive their memories of the past, and use of cribs and nurseries which allow patients to “instinctively” occupy their time by caring for baby dolls.

It is encouraging to see Jonathan’s vision, and how far the industry has come in providing great environments for those affected by this disease.

The answer definitely is – it depends.  Since the great recession started in October, 2008 prices have gone down.  Statistically speaking, the recovery began six months ago, though our industry always lags.  The good news is that we are seeing banks begin to lend, and clients are calling to ask what has happened to their prices on projects bid one to three years ago. 

The best way to answer this question is to check the prices.  This can be done by calling the low bidders and verifying, or if the project looks imminent, rebidding it.  Here’s what we found:

At the risk of upsetting my HUD friends, we have been constructing FHA housing for all of my 28 years with the company.  We started with the straight HUD insured loan program, often coupled with Section 8 rent subsidies.  It took a year to close these.  To speed it up, they went to the “co-insured” HUD program, which sped it up to 12 months.  To speed it up further, they went to the HUD “fast track”, which did speed it up to approximately 52 weeks.  To further enhance it, they went to “ultra fast track”, which sped it up to – you guessed it – about 365 days to close.  The MAP Program (Multi Family Accelerated Processing) was initiated to further enhance the speed of closing, and it took approximately one year. 

This is a terrific time to get great construction prices for your senior living, skilled nursing, or multi family project. Material prices are down, subcontractors are aggressive in their pricing, only the most productive workers remain employed, and general contractors are anxious to start work. One of our clients recently decided to take advantage of this by competitively bidding his project. Will he get a deal, or not?

To best understand this, it’s important to look at the underlying process and numbers. On bid day prices come flying in. The velocity is so incredible, it’s difficult to qualify these subcontractors, and (at times) to know whether the prices are adequate to perform the work. A number of subcontractors are ridiculously low (40%+) – admittedly desperate. We do our best to convince them they have a bad number, but they persist in desperation. In many cases these happen to be subcontractors that we know and that were unreliable, had poor quality and undercapitalized in good times. What kind of shape are they in now? We have to evaluate whether to take these numbers, knowing that our competitors who may or may not know these subcontractors, are likely to use these numbers. The end number to the client will appear to be a good deal, but is it? Some of the questions that come to mind are as follows: