I am hearing different stories from clients in my discussions. There is no doubt that occupancies in Senior Living are down. There is no doubt that projects are requiring more equity, and equity demands a higher return. There is no doubt that staffing is more difficult to find and more expensive. There is also no doubt that construction prices have risen dramatically in the past six to eight months due to supply issues caused by a myriad of factors.
A client said to Bob Ritter, our Director of Business Development, the other day that he couldn’t look at new construction projects because construction costs were too high. I wonder if that is accurate. My experience in owning Senior Living projects is that capital costs are a minor part of the total operating budget. Operating costs are the vast majority. So if construction costs go up 10%, as an example, it...Read More >