“We love the design concept, but what will it cost to build?”
Cost estimating has always been a critical component in the planning process for senior living projects, which in the not-for-profit world have often involved bond financing. In today’s economy it is that much more important to answer this question early. But at the same time it’s increasingly challenging due to market volatility, worker shortages and lingering supply chain issues.
So how can you budget, and ultimately control costs, for your next senior living project? It starts with understanding a few fundamentals.
What Goes into a Cost Projection?
Cost projections are so much more than a standard cost per square foot. There are a myriad of factors that must be taken into account:
Project Scope: is the foundational program menu of spaces, functions, capacity and sizes. It’s when goals and aspirations are merged with quantitative requirements.
Project Size: is calculated in terms of gross and net square footage.
- Gross floor area includes everything within a building’s exterior walls.
- Net floor area is the usable square footage excluding walls, columns, lobbies, corridors, stairways, elevators, closets and utility chases.
Grossing Factor: refers to the ratio of revenue generating (living units) to common areas, utilities and wall spaces. It is impacted by building shape and program components.
- A straightforward linear building typically has a lower grossing factor than a structure with bends or curves.
- Smaller building types have a higher grossing factor than a larger building with more living units, such as a hybrid home versus a larger apartment building or a small house versus a larger care setting.
- Social spaces on each floor of an apartment building increase the grossing factor. For senior care settings, a medical model typically has a lower grossing factor than a household model which tends to have more common spaces.
Download the Senior Living Project Cost White Paper:
To continue reading about what goes into project costs, as well as factors that drive costs, strategies to control project costs and the cost of doing nothing, download the Whitepaper via the form below.
For more senior living topics, trends, projects and information about Hybrid Homes, Memory Care, Reinvention and more, check out our Resources Page.