As Baby Boomers age, the demand for new senior living facilities has inevitably risen. John Foster, president of Foster Senior Living, has this growing demand in mind when planning his developments. But he knows that if timing is off and beds go unfilled, it would cost a lot of money. This is where a market study comes in handy.
Foster hired Tennessee-based Senior Market Research Associates, who completed a market study in 2018. The group analyzed demographic data in two areas of Springfield where Foster is planning his new developments Springhouse Village East, which saw construction begin in May, and Springhouse Village South, which is set to move forward later in 2019. The study reviewed area ages, income levels, similar developments in progress and vacancies in existing facilities. This helps determine whether there’s a need to support additional services such as assisted living, memory care and independent living.
Although Foster sees conducting market studies as a good business practice in his field, Missouri law actually requires a certificate of need when building assisted living facilities to curb unnecessary developments. These market studies, in turn, offer data to illustrate projected need and are a key part of the planning process for new developments. Market studies can also help convince financiers to move forward on a project. Thankfully, the study’s results showed ample projected need for Foster’s developments in Springfield.
Even after getting positive results back from a study, Foster and his team double check the numbers, making sure everything is accurately portrayed. “You’re going to be out several million dollars in debt to build something that’s not needed,” Foster says. “We were very careful about that.” Foster received his certificate of need and officially broke ground on Springhouse Village East in early May.