Understanding Your Senior Living Market: An Important First Step - The Market Demand Study

These are challenging times in senior living. Recent building in some markets have left them close to saturation, especially in assisted living and memory care. Other markets are seeing the expansion of active adult communities and home based care chipping away at their prospects. Yet most markets are seeing tremendous growth in the senior living population which is predicted to overwhelm us. 

Maybe your occupancy has been fluctuating and you’re not meeting budgeted projections, or fewer prospects are coming through your door. On the flip side, perhaps you are doing so well, you’re bursting at the seams and wondering about an expansion. 

Which scenario describes your community right now? How are you meant to know what’s happening and what may happen years from now? Addressing current occupancy struggles and planning for inevitable change is critical. At Lauren Rose Senior Advisors we’ve learned that understanding your competitors in your market and their fees is a first step to assessing your position and potential in the market. Another way to understand your market is to request a Market Demand Study. 

LRSA has recently partnered with PLS Market Analysis, LLC to offer you exactly that. In our partnership with PLS, we’re working directly with Pam Steitz, a leader in healthcare and senior living with experience in strategic planning, market feasibility, operations and finance. Following 15 years of experience with market feasibility studies and senior housing trends analyses at Brecht Associates, Pam launched PLS to continue helping senior communities and healthcare organizations make better informed decisions.

By incorporating competitor research and market demographics, the Market Demand Study can tell you what to expect in your market as it relates to occupancy levels now and five years in the future.

For both new construction and existing senior living communities, a Market Demand Study determines the ability of your market to support the units within your existing community or an expansion that you may be considering. The study can be done for independent living, assisted living, memory care and/or skilled nursing or rehab. 

Importantly, the study determines two key components: market penetration rate (the proportion of qualified senior households that are already residing in age-restricted communities in your market) and the project penetration or “capture” rate (the percentage of qualified households that must be captured to reach or sustain stabilized occupancy in your community). Total unit potential is also calculated. This describes the number of units that may be supported and sustained in your market in the form of a new community development or an expansion of your existing community.

With knowledge of your market’s level of saturation you’ll understand the likelihood of meeting your budgeted occupancy projections this year and the next. You’ll be armed and ready to make decisions related to marketing budgets and marketing staff to increase occupancy or to pivot if demand in the market is just not there. 

In a saturated market, the study makes recommendations related to repositioning, downsizing or the conversion of existing units. In a growing market, the study focuses on the potential for expansion at each level of care and how many units or beds the market will support in the future.

PLS Market Analysis has faced each scenario together with its not-for-profit and for-profit clients throughout the nation. In one very rural market, we recommended a client reposition and regain market share by converting assisted living units to independent living units, increasing occupancy at both levels of care, creating a continuum of care and offering a product that the market had never seen. In an urban market, our data-driven market demand study assisted a well-known client to reconfigure its campus, add independent living and reduce its overall nursing bed complement. When necessary, we’ve also cautioned our clients against moving forward with a planned development that was not supported by the demographics and level of competition in the market.

With the right information, a Market Demand Study will help you gain an understanding of your market, your position in that market and the potential for your continued success. Contact Lauren Rose Senior Advisors for assistance determining if now is the time for you to engage in a Market Demand Study.