Senior Living Construction Booms 11 Percent, Fueled by Surging Demand
Senior living construction is booming.
According to McKnights Senior Living, senior living construction has surged 11% since last summer, with public sector projects outpacing the private sector in the first half of the year.
That’s according to a new report prepared for the American Seniors Housing Association by construction company, general contractor, design-builder and construction manager The Weitz Co.
“We are seeing optimism in the private sector as hopes for a federal rate cut becomes more likely by year end,” report authors Larry Graeve and Amy Burk wrote. “Currently, major indices are trending lower and we are seeing modest compression of contractor margins as subcontractors seek to fill their backlog.”
The composite pricing on materials is around 4.5% annually, Weitz reported.
The per-square-foot cost of construction this summer in independent living has averaged $237 to $360 depending on materials and finishes used, virtually unchanged from $236 to $367 per gross square foot reported this winter. Costs in assisted living, meanwhile, have averaged $274 to $447 gross square foot, and costs in skilled nursing have averaged $314 this $499 this summer.
The shortage of skilled workers and wage inflation continue to challenge senior living contractors, with wages for skilled labor increased by 4% to 5% since this time last year, according to the report. Unemployment in the construction industry sits at 3.3% as of the end of last month, with overall unemployment in the United States at 4.3%.
The report’s authors said that they “anticipate the overall escalation rate for the next 12 months to be in the 4% to 5% range.”
