Senior Housing Market Demand & Business
Model Analysis & Report
Prepared For:
Quattro Road Development, LLC
1200 Quattro Road
Burlington, Texas 77799
(499) 555.1212
October 2010
October 2010/April 2011 Forecast Period
Prepared By:
Rainmaker Marketing Corporation, Inc.
15519 Dawnbrook Drive
Houston, Texas 77068-1919
(281) 537.1200
www.rainmakermarketing.com
©Copyright 2010, Rainmaker Marketing Corporation, Inc. All
rights reserved.
October 2010
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Burlington, Texas Sub-Market Senior Housing Industry Report
OVERVIEW OF REPORT
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he purpose of this memorandum (the
THIS IS A SENIOR HOUSING
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“Report”) is to illustrate certain aspects of the
MARKET ANALYSIS REPORT
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senior housing industry’s commercial real
COVERING
A
5-YEAR
estate development potential for a defined market
FORECAST PERIOD FOR NEW
surrounding a proposed project site located as shown
CONSTRUCTION
DEMAND
on the market area map on page 13 – the “Site”).
OWING TO INDEPENDENT,
The Report presents three (3) component market
ASSISTED AND DEMENTIA
analyses that are used for the purposes of
CARE HOUSING PROGRAMS.
determining the potential for entrenched demand for
the development of various classes of new senior
housing living commercial real estate properties that were calculated upon markets that were
geographically defined based upon non-peak travel distances, to wit:
Drive Time: 25 minutes (the “Inner Market Area”).
Drive Time: 30 minutes (the “Middle Market Area”).
Drive Time: 35 minutes (the “Outer Market Area”).
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The market demographics analysis was prepared by Rainmaker Marketing Corporation, Inc.
(”RMC”), a senior housing development industry consulting firm that serves all of North America
and the Caribbean Basin. RMC’s findings presented in this Report are based upon a three-step
analysis process:
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An initial analysis of key population demographic points for the purposes of demonstrating
anecdotal evidence of long-term market support based upon the growth patterns of certain
demographically-significant, senior/elderly-related datasets. The information was collected
for all three (3) of the assumed marketing area geographies and included population,
households, families, household counts based upon householder living status, household
and family incomes and measures of net worth and disposable incomes sufficient to
demonstrate the long-term market support potential for the various classes of senior
housing under consideration; then
A new construction demand model was created by RMC and populated with demographic
information (provided by third-party demographics vendors) based upon a screening
process that conforms to commercial construction financing underwriting industry
benchmarks and expectations, and include approval threshold measurements regarding the
statistical likelihood of a senior householder to require housing and related lifestyle and selfcare support within the context of an organized, large-scale commercial real estate-based
enterprise. This analysis is populated for a period of time that would be expected to
correspond to the entry and stabilization of a new property. RMC’s resulting demand model
spreadsheets provide qualified/limited net buildable demand computations for all classes of
living units for the entry-fee Independent Living Facility (“ILF”), rental ILF, rental Assisted
Living Care Facility (“ALCF”) and rental Alzheimer’s/Dementia Assisted Living Care Facility
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(“ALZ/ALCF”) asset classes that include congregate living and multi-level care program
property designs. All demand model calculations are made, cet. par., for a for-profit
endeavor versus a not-for-profit venture; then
A final set of computations was created to provide price point guidelines based upon crossmatching senior households with their component net worth and disposable incomes in
order to project baseline sustainable rate information on a median facility basis for all four
(4) classes of senior housing analyzed in this Report.
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The document also includes an appendix section that offers a listing of additional spreadsheets
that, for the purposes of brevity, were not included in the body of the Report and a glossary
section that provides a schedule of the terms and definitions used in the Report.
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Exhibit 1: Pie Chart Presentation of Net Buildable Demand by Housing Class by Percentage of
Total Senior Housing By Assumed Marketing Area Geography
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RMC finds there to be an expectation of entrenched demand supporting the near-term and
long-term development and operating forecast windows subject to the limiting conditions set
forth in this Report for each class of senior housing for 2010 (the most likely calendar year of
project entry) as follows:
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Age-Restricted Multifamily Net Buildable Demand of 423 units for the Inner Market Area
PMA. This represents a market penetration rate of 10.00%, while the same unit count
represents a market penetration rate of 7.04% for the assumed Middle Market Area PMA
and a market penetration rate of 5.21% for the assumed Outer Market Area PMA.
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Entry-Fee ILF Net Buildable Demand of 204 living units for the Inner Market Area PMA. This
represents a penetration rate of 10.00%, while the same unit count represents a
penetration rate of 7.52% for the Middle Market Area PMA and a penetration rate of 5.41%
for the Outer Market Area PMA.
Rental ILF Net Buildable Demand of 238 living units for the Inner Market Area PMA. This
represents a penetration rate of 10.00%, while the same unit count represents a
penetration rate of 7.54% for the Middle Market Area PMA and a penetration rate of 3.45%
for the Outer Market Area PMA.
Rental ALCF Net Buildable Demand of 83 living units for the Inner Market Area PMA. This
represents a penetration rate of 10.00%, while the same unit count represents a
penetration rate of 7.53% for the Middle Market Area PMA and a penetration rate of 5.66%
for the Outer Market Area PMA.
Rental ALZ/ALCF Net Buildable Demand of 48 living units for the Inner Market Area PMA.
This represents a penetration rate of 10.00%, while the same unit count represents a
penetration rate of 7.29% for the Middle Market Area PMA and a penetration rate of 5.37%
for the Outer Market Area PMA.
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The results of the market demand analysis were also interpreted in terms of the expected
limitations that market conditions are likely to impose upon the costs of development and the
maximum expected lending and investment limits the market area may impose on any proposed
project based upon an analysis of the subject marketing area’s reported disposable income and
net worth. This analysis was undertaken for the following program types:
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ILF Rental Housing Program. A total of xx units of rental program independent living facility
housing being assumed to be built out using the Inner Market Area demographics.
ALCF Rental Housing Program. A total of xx units of rental program assisted living care
facility housing being assumed to be built out using the Inner Market Area demographics.
ALZ/ALCF Rental Housing Program. A total of xx units/beds of rental program
dementia/Alzheimer’s being assumed to be built out using the Inner Market Area
demographics.
Rental CCRC Housing Program. Continuing Care Retirement Communities (CCRCs) offer
independent living facility accommodations in conjunction with assisted living and dementia
care. Prior to the changes in the Medicare system (i.e.: reimbursement being provided for
home health care services by a home health care provider), the typical CCRC included a
skilled nursing unit. Today, the final component of supportive care can be provided by the
home health agency so the prototypical rental program CCRC includes rental independent
living, rental assisted living and rental dementia/Alzheimer’s care assisted living housing.
Using the Inner Market Area demographics, this resulted in a maximum of xx housing units
being assumed to be built out in all (xx ILF units, XX ALCF units and xx ALZ/ALCF Units).
Rental Congregate Living Housing Program. Congregate living housing programs are those
programs that combine rental independent living facility accommodations with standard
rental assisted living housing program services. Using the Inner Market Area demographics,
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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this resulted in xx housing units being assumed to be built out in all (xx ILF units and xx ALCF
units).
Exhibit 2: Line Graph Presentation of Expected Maximum Sustainable Costs of Development
Per Living Unit by Program Type: Inner Market Area
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The resulting analysis was undertaken based upon using a weighting approach that focuses on
market income and net worth demographics – the only true metric that demonstrates the
consumer’s buying power that would be expected to be expressed in terms of the housing
program the market can actually afford to support. This metric expresses the resulting limits in
terms of the expected Current Year Household Disposable Income and Current Year Household
Net Worth estimates for the Households Aged 75 and Older within the assumed Inner Market
PMA. This metric incorporates institutional underwriting benchmarks as the basis to “reverse
engineer” the result.
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The Inner Market PMA geography demonstrates the following support levels for development
budgeting purposes:
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The ILF program is expected to support an average of $188,784 per living unit development
cost.
The ALCF program is expected to support an average of $191,987 per living unit
development costs.
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The ALZ/ALCF program is expected to support an average of $213,752 per living unit
development costs.
The rental CCRC program is expected to support an average of $193,816 per living unit
development costs.
The congregate living program is expected to support an average of $200,119 per living unit
development costs.
Exhibit 3: Project Development Budget Analysis by Program Type: Inner Market Area
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Once the total development budget limitations (on a per living unit basis) were extrapolated
from the income and wealth data, the maximum amount of debt service was computed on the
basis of the estimated operating income the maximum facility development program profile
would be reasonably expected to support. As a result, Rainmaker estimates the following
limitations to apply to the development programs:
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For the ILF development program (stand-alone basis) the program presents a maximum of
160 units being developed. This would result in a Total Development Cost (TDC) of
$30,205,468 and a supportable construction mortgage debt (current market conditions
assumed) of $25,372,593 for the project (or $158,579 per living unit).
For the ALCF development program (stand-alone basis) the program presents a maximum of
80 units being developed. This would result in a TDC of $15,358,936 and a supportable
construction mortgage debt of$12,594,327 for the project (or $157,429 per living unit).
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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For the ALZ/ALCF development program (stand-alone basis) the program presents a
maximum of 48 units/beds being developed. This would result in a TDC of $10,201,220 and
a supportable construction mortgage debt of$8,160,976 for the project (or $171,002 per
living unit/bed).
For the rental CCRC development program, the program presents a maximum of 288 units
being developed. This would result in a TDC of $55,765,624 and a supportable construction
mortgage debt of $46,127,896 for the project (or $162,805 per living unit).
For the congregate living facility development program, the program presents a maximum
of 128 units being developed. This would result in a TDC of $25,560,156 and a supportable
construction mortgage debt of$20,755,303 for the project (or $162,500 per living unit).
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Exhibit 4: Bar Chart Comparison of Expected Financial Investment Leverage of Capital Account
Investments by Type of Long-Term Financing Vehicle
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The final aspect of the attending development program costs analysis was to compare the
relative levels of financial investment leverage that would be theoretically available for each
class of stand-alone project assets that may be given due consideration by the project developer
using institutional underwriting benchmarks and Rainmaker Marketing Corporation’s
proprietary software modeling program. This produced the following results:
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HUD/FHA Loan Insurance Programs. Using the Section 221(d)(4) and Section 232 Loan
Insurance Program underwriting and mortgage processing guidelines set forth under the
Multifamily Housing Processing Handbook (4610.1), the expected total financial leverage
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(LTV) for the ILF program was estimated as 86.77%, while the ALCF and ALZ/ALCF Programs
were estimated at 84.66% and 86.77%, respectively.
Conventional Mortgage Program. Using institutional underwriting benchmarks and current
capital market terms and pricing as a guide, the expected total financial leverage (LTV) for
the ILF program was estimated as 67.28%, while the ALCF and ALZ/ALCF Programs were
estimated at 65.64% and 67.28%, respectively.
Sale/Leaseback Program. Using institutional underwriting benchmarks and current capital
market terms and pricing as a guide, the expected total financial leverage (LTV) for the ILF
program was estimated as 85.42%, while the ALCF and ALZ/ALCF Programs were estimated
at 83.33% and 85.42%, respectively.
Fractional Real Estate (TIC Plan) Financing Program. Using the Rainmaker Marketing
Corporation proTIC fractional real estate sales plan financing program terms and pricing as a
guide, the expected total financial leverage (LTV) for the ILF program was estimated as
96.92%, while the ALCF and ALZ/ALCF Programs were estimated at 96.64% and 95.00%,
respectively.
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ABOUT THE REPORT
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he Report is based upon a comparative analysis approach where identical analysis steps
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are used for the demographic data developed for each of the assumed drive-time limited
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areas. This creates the potential for a lot of reporting errors and confusion for the
reader. Accordingly, all spreadsheets and charts based upon the Inner Market Area have red
borders; all of the spreadsheets and charts based upon the Middle Market Area have green
borders; and, all of the spreadsheets and charts based upon the Outer Market Area have blue
borders. These elections conform to the computer’s projected geographical area coverage for
each of the drive-time based market areas used in this Report (see map on page 13).
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The Report has been prepared by RMC using information and data that is deemed to be reliable
information in the case of each data vendor and/or informational story, listing, database or
other information repository that eventually provided information used in this Report. RMC
assumes no responsibility for reporting errors beyond the reasonable commercial control of
RMC. All assumptions as to the number of market residents that may in fact choose to occupy a
housing dwelling unit within the defined market areas over the course of the forecast period
require verification in the field, as RMC’s data is limited to searchable databases and reports
made to regulatory bodies that may bear upon the information analysis process.
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All senior housing development programs should have a complete, full-scope market feasibility
analysis report prepared for the purposes of substantiating the client’s due diligence burden for
satisfying construction financing underwriters.
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Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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Burlington, Texas Sub-Market Senior Housing Industry Report
CONTENTS
Overview of Report .......................................................................................................................... 2
About the Report .............................................................................................................................. 8
Table of Exhibits ............................................................................................................................... 9
Report Preparation Means & Methods ..........................................................................................12
The Client, the Project & Project Site .............................................................................................12
The Macro Analysis.........................................................................................................................15
Populations, Households & Families Indicators ........................................................................ 17
Income & Wealth indicators ...................................................................................................... 23
Housing Stock ............................................................................................................................ 29
Site-Based Senior Housing New Construction Demand Analysis ...................................................32
Age-Restricted Rental Multifamily Housing New Construction Demand.................................. 32
Entry-Fee Independent Living Facility New Construction Demand........................................... 34
Rental Independent Living Facility New Construction Demand ................................................ 37
Rental Assisted Living Care Facility New Construction Demand ............................................... 39
Rental Alzheimer’s Assisted Living Care Facility New Construction Demand ........................... 42
Project Price Points.........................................................................................................................44
Conclusions of the Site-Based Senior Housing New Construction Demand Analysis ....................45
About Rainmaker Marketing Corporation......................................................................................48
Glossary of Terms ...........................................................................................................................49
Appendix Section ............................................................................................................................52
TABLE OF EXHIBITS
EXHIBIT 1: PIE CHART PRESENTATION OF NET BUILDABLE DEMAND BY HOUSING CLASS BY PERCENTAGE OF TOTAL SENIOR
HOUSING BY ASSUMED MARKETING AREA GEOGRAPHY..................................................................................... 3
EXHIBIT 2: LINE GRAPH PRESENTATION OF EXPECTED MAXIMUM SUSTAINABLE COSTS OF DEVELOPMENT PER LIVING UNIT BY
PROGRAM TYPE: INNER MARKET AREA ........................................................................................................... 5
EXHIBIT 3: PROJECT DEVELOPMENT BUDGET ANALYSIS BY PROGRAM TYPE: INNER MARKET AREA ...................................... 6
EXHIBIT 4: BAR CHART COMPARISON OF EXPECTED FINANCIAL INVESTMENT LEVERAGE OF CAPITAL ACCOUNT INVESTMENTS BY
TYPE OF LONG-TERM FINANCING VEHICLE ....................................................................................................... 7
EXHIBIT 5: PROJECT SITE MAP W/DRIVE-TIME MARKET BOUNDARIES SHOWN ............................................................. 13
EXHIBIT 6: COLUMNAR CHART DISTRIBUTION OF PROJECTED POPULATION BY YEAR BY MARKETING AREA GEOGRAPHY ........ 16
EXHIBIT 7: DISTRIBUTION OF TOTAL POPULATION BY AGE GROUP SPREADSHEET; INNER MARKET ..................................... 17
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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EXHIBIT 8: CHART PRESENTATION OF PROJECTED HOUSEHOLDS BY AGE GROUP BY REPORTING YEAR; INNER MARKET AREA . 18
EXHIBIT 9: BAR CHART PRESENTATION OF DISTRIBUTION OF CURRENT YEAR/5-YEAR HOUSEHOLDS BY AGE GROUP BY
EXPECTED ANNUAL GROWTH RATE .............................................................................................................. 20
EXHIBIT 10: DISTRIBUTIONS OF FAMILIES BY FAMILY INCOME BY REPORTING YEAR SPREADSHEET; INNER MARKET AREA ...... 22
EXHIBIT 11: DISTRIBUTION OF HOUSEHOLDS BY AGE BY INCOME SPREADSHEET; INNER MARKET AREA .............................. 23
EXHIBIT 12: 5-YEAR DISTRIBUTION OF HOUSEHOLDS BY AGE BY INCOME SPREADSHEET; INNER MARKET AREA ................... 24
EXHIBIT 13: DISTRIBUTION OF HOUSEHOLDS BY DISPOSABLE INCOME BY AGE SPREADSHEET; INNER MARKET AREA ............. 25
EXHIBIT 14: BAR CHART COMPARISON OF DISTRIBUTION OF MEDIAN HOUSEHOLD INCOME BY AGE GROUP; INNER MARKET
AREA VS. U.S. NATIONAL MARKET .............................................................................................................. 26
EXHIBIT 15: CURRENT YEAR HOUSEHOLD NET WORTH; INNER MARKET AREA .............................................................. 27
EXHIBIT 16: PIE CHART OF HOUSING OCCUPANCY BY OCCUPANT TYPE DISTRIBUTION; INNER MARKET AREA ..................... 28
EXHIBIT 17: HOUSING STOCK ANALYSIS BY PRICE BRACKET; INNER MARKET AREA ......................................................... 30
EXHIBIT 18: AGE-RESTRICTED RENTAL MULTIFAMILY DEMAND SPREADSHEET; INNER MARKET AREA ................................ 33
EXHIBIT 19: ENTRY-FEE ILF DEMAND ANALYSIS SPREADSHEET; INNER MARKET AREA .................................................... 36
EXHIBIT 20: RENTAL ILF DEMAND ANALYSIS SPREADSHEET; INNER MARKET AREA ........................................................ 38
EXHIBIT 21: RENTAL ALCF DEMAND ANALYSIS SPREADSHEET; INNER MARKET AREA ..................................................... 41
EXHIBIT 22: RENTAL ALZ/ALCF DEMAND ANALYSIS SPREADSHEET; INNER MARKET AREA.............................................. 43
EXHIBIT 23: BAR CHART OF DISTRIBUTION OF NEW CONSTRUCTION NET DEMAND BY CLASS OF SENIOR HOUSING .............. 46
EXHIBIT 24: CHART PRESENTATION OF EXPECTED MAXIMUM SUSTAINABLE FHA/HUD MORTGAGE PER LIVING UNIT BY
PROGRAM TYPE........................................................................................................................................ 53
EXHIBIT 25: SYNDICATION COSTS ANALYSIS SPREADSHEET – FRACTIONAL REAL ESTATE FINANCING PLAN .......................... 54
EXHIBIT 26: DISTRIBUTION OF TOTAL POPULATION BY REPORTING YEAR BY AGE SPREADSHEET; OUTER MARKET AREA ........ 55
EXHIBIT 27: DISTRIBUTION OF TOTAL POPULATION BY REPORTING YEAR BY AGE SPREADSHEET; MIDDLE MARKET AREA....... 56
EXHIBIT 28: DISTRIBUTION OF FAMILY HOUSEHOLDS BY REPORTING YEAR BY INCOME BRACKET SPREADSHEET; OUTER MARKET
AREA ...................................................................................................................................................... 57
EXHIBIT 29: DISTRIBUTION OF FAMILY HOUSEHOLDS BY REPORTING YEAR BY INCOME BRACKET SPREADSHEET; MIDDLE
MARKET AREA ......................................................................................................................................... 58
EXHIBIT 30: DISTRIBUTION OF HOUSEHOLDS BY AGE BY INCOME BRACKET (CURRENT YEAR) SPREADSHEET; OUTER MARKET
AREA ...................................................................................................................................................... 58
EXHIBIT 31: DISTRIBUTION OF HOUSEHOLDS BY AGE BY INCOME BRACKET (CURRENT YEAR) SPREADSHEET; MIDDLE MARKET
AREA ...................................................................................................................................................... 59
EXHIBIT 32: DISTRIBUTION OF HOUSEHOLDS BY AGE BY INCOME BRACKET (5-YEAR) SPREADSHEET; OUTER MARKET AREA... 59
EXHIBIT 33: DISTRIBUTION OF HOUSEHOLDS BY AGE BY INCOME BRACKET (5-YEAR) SPREADSHEET; MIDDLE MARKET AREA . 60
EXHIBIT 34: HOUSEHOLD NET WORTH (CURRENT YEAR) DISTRIBUTION SPREADSHEET; OUTER MARKET AREA ................... 61
EXHIBIT 35: HOUSEHOLD NET WORTH (CURRENT YEAR) DISTRIBUTION SPREADSHEET; MIDDLE MARKET AREA .................. 62
EXHIBIT 36: CURRENT YEAR DISTRIBUTION OF HOUSEHOLDS BY DISPOSABLE INCOME BRACKET BY AGE GROUP SPREADSHEET;
OUTER MARKET AREA ............................................................................................................................... 63
EXHIBIT 37: CURRENT YEAR DISTRIBUTION OF HOUSEHOLDS BY DISPOSABLE INCOME BRACKET BY AGE GROUP SPREADSHEET;
MIDDLE MARKET AREA.............................................................................................................................. 64
EXHIBIT 38: HOUSING BY OCCUPANT TYPE & HOUSING UNIT VALUE CLASS SPREADSHEET: OUTER MARKET AREA .............. 65
EXHIBIT 39: HOUSING BY OCCUPANT TYPE & HOUSING UNIT VALUE CLASS SPREADSHEET: MIDDLE MARKET AREA ............ 66
EXHIBIT 40: RENTAL AGE-RESTRICTED MULTIFAMILY DEMAND SPREADSHEET; OUTER MARKET AREA ............................... 67
EXHIBIT 41: RENTAL AGE-RESTRICTED MULTIFAMILY DEMAND SPREADSHEET; MIDDLE MARKET AREA ............................. 68
EXHIBIT 42: RENTAL ILF DEMAND ANALYSIS SPREADSHEET; OUTER MARKET AREA ....................................................... 69
EXHIBIT 43: RENTAL ILF DEMAND ANALYSIS SPREADSHEET; MIDDLE MARKET AREA ...................................................... 70
EXHIBIT 44: ENTRY-FEE ILF DEMAND ANALYSIS SPREADSHEET; OUTER MARKET AREA ................................................... 71
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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EXHIBIT 45: ENTRY-FEE ILF DEMAND ANALYSIS SPREADSHEET; MIDDLE MARKET AREA ................................................. 72
EXHIBIT 46: RENTAL ALCF DEMAND ANALYSIS SPREADSHEET; OUTER MARKET AREA .................................................... 73
EXHIBIT 47: RENTAL ALCF DEMAND ANALYSIS SPREADSHEET; MIDDLE MARKET AREA .................................................. 74
EXHIBIT 48: RENTAL ALZ/ALCF DEMAND ANALYSIS SPREADSHEET; OUTER MARKET AREA............................................. 75
EXHIBIT 49: RENTAL ALZ/ALCF DEMAND ANALYSIS SPREADSHEET; MIDDLE MARKET AREA ........................................... 76
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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REPORT PREPARATION MEANS & METHODS
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Burlington, Texas Sub-Market Senior Housing Industry Report
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he Report has been prepared based upon the following defined processes:
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Initial site analysis – the proposed project site is analyzed in terms of potential
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traffic patterns and population density to determine the applicability of certain
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assumptions pertaining to the primary marketing area geography; then
Collection of demographic information – the means of the Report analysis. RMC collected
various databases of demographic information for the purposes of this analysis and
presentation. These databases included population-based demographic information,
housing-based demographic information, microeconomic and macroeconomic information
and site mapping information. Some information was readily available on the Internet while
other databases required the payment of a fee in order to access the requested
information; then
Initial Macroeconomic Indicators Demographics Analysis. This technical analysis is for the
purposes of determining developing trends relative to various population groupings,
household groupings, family groupings, wealth and income groupings to determine the
potential for long-term market support based upon the supposition that a growing and
expanding market population will continue to support the construction of new senior
housing facilities of various classes within the given market area; then
Site-based senior housing new construction demand analysis – the primary marketing area
population demographics information is used to generate specific demand models for
forecasting the demand for senior housing new construction at the independent living,
assisted living and dementia assisted living care program levels.
RMC has no securities (equity, debt or hybrid) interest in Client and is acting as an
independent consultant to Client for the purposes of producing this Report. Likewise, RMC
owns no real property interest in the proposed Project or the Proposed Project Site, nor
does RMC own an option to purchase same on any terms not offered to the general public.
This is a fee-for-services market research report and opinion.
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THE CLIENT, THE PROJECT & PROJECT SITE
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his Report was ordered for the Quattro Road Developers, LLC (the “Client”) who is
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engaged in the business of developing, capitalizing, constructing, marketing, operating
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and otherwise promoting commercial real estate properties within the senior housing
industry. The Client has selected a parcel of real property located at 1200 Quattro Road,
Burlington, TX in (the “Site”) as the physical address where it is assumed that the proposed
senior housing project will be constructed, marketed and operated on a proprietary basis (the
“Project”).
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Exhibit 5: Project Site Map w/Drive-Time Market Boundaries Shown
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The goal of this Report is to describe certain demographic data analyses for the purposes of
demonstrating the potential near-term market demand for the various classes of senior housing
programs that are commonly (and successfully) developed on properties essentially similar
(demographically speaking) to that of the proposed Project Site; and in addition, present
anecdotal evidence as to the potential long-term market demand/support for senior housing
industry businesses in general.
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For the purposes of this Report, the proposed Project Site is further defined in terms of the
projected geographical area within which the proposed Project would be expected to garner at
least 75% of its ongoing sales revenues – an area defined as the “geographical primary
marketing area” or “primary marketing area”. The primary marketing area for senior housing
properties is elastic, in that, as an area becomes increasingly populated, the primary marketing
area geography for that senior housing facility will contract to a certain extent. Generally, the
process of defining the primary marketing area of a senior housing property is based upon the
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distance that can be traveled in an automobile during non-peak travel times. The more urban
areas have (prototypically) the smallest areas (with drive-time boundaries as small as 25
minutes, or even less as population density increases) while the prototypical urban project
would be expected to have a primary marketing area of 30 minutes and can be even greater in
certain circumstances based upon the relative saturation level of the surface highway system
within the market. Rural projects tend to have greatly expanded primary marketing areas with
expectations exceeding 45 minutes travel time for destination class properties and extreme
rural areas. The drive-time analysis is important in that it provides the opportunity to create
databases of demographic information based upon records that, more or less, mimic
consumer/end-user buying preferences leading to the hypothesis that the drive-time based
market geography projection system is a superior method versus the old donut and radii
demographic analysis approaches championed in the 1980s and early 1990s. For the purposes
of conducting an analysis that would be considered by reasonable third-party observers to be a
reasonable and conservative estimate of the market potential for new construction senior
housing projects, RMC projects/defines the primary marketing area of senior housing facilities in
accordance with the following schedules:
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Urban Projects. For projects located in and around major urban areas, the following
assumptions shall be used:
Outer Drive-Time Boundary – represents the prototypical senior housing catchment
area and all spreadsheets for this level of market area are presented in the Appendix
Section (see page 52). This geographical market area is demarked with a blue border on
the site locator map and all spreadsheets and graphics at this level of geography have a
blue background and/or blue border bars based upon a drive-time marketing area
assumed to be limited to 35 minutes from the Site.
Middle Drive-Time Boundary – represents the prototypical senior housing catchment
area for a mature market area and/or a market area with slightly higher than typical
population density. All spreadsheets for this market area are presented in the Appendix
Section (see page 52). This assumed geographical market area is demarked with a green
border on the site locator map and all spreadsheets and graphics at this level of
geography have a green background and/or green border bars based upon a drive-time
marketing area assumed to be limited to 30 minutes from the Site.
Inner Drive-Time Boundary – represents the prototypical senior housing catchment area
for a mature market that is highly urbanized in character, presenting the highest
concentrations of resident populations and congested road net. All spreadsheets for
this market area are presented in the body of the Report because they represent the
most conservative market potential of the forecast. This assumed geographical market
area is demarked with a red border on the site locator map and all spreadsheets and
graphics at this level of geography have a red background and/or red border bars based
upon a drive-time marketing area assumed to be limited to 25 minutes from the Site.
Rural/Destination Area Projects. For projects located in lightly populated, rural areas,
the assumptions used shall be:
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
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35-Minute Drive-Time Boundary – represents the prototypical senior housing
catchment area and all spreadsheets for this level of market area are presented
in the Appendix Section (see page
52). This geographical market area is
demarked with a blue border on the
The prototypical senior housing
site locator map and all spreadsheets
and graphics at this level of property has a geographical
geography have a blue background marketing area defined by the
expected
average
driving
and/or blue border bars.
40-Minute Drive-Time Boundary – distance (non-peak) a family
represents the prototypical senior would be likely to accept. This is
housing catchment area for a mature typically around 30 minutes
market area and/or a market area driving distance from the site to
with slightly higher than typical the family home for urban areas
population density. All spreadsheets
to as much as 60 minutes for
for this market area are presented in
rural/destination
area
the Appendix Section (see page 52).
properties.
This assumed geographical market
area is demarked with a green border on the site locator map and all
spreadsheets and graphics at this level of geography have a green background
and/or green border bars.
45-Minute Drive-Time Boundary – represents the prototypical senior housing
catchment area for a mature market that is highly urbanized in character,
presenting the highest concentrations of resident populations and congested
road net. All spreadsheets for this market area are presented in the body of the
Report because they represent the most conservative market potential of the
forecast. This assumed geographical market area is demarked with a red border
on the site locator map and all spreadsheets and graphics at this level of
geography have a red background and/or red border bars.
30
31
In the case of the proposed Project Site (the subject of this market analysis report – “Site 1” or
“Subject Site” identified in various spreadsheets) the urban area boundary sets will be used.
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THE MACRO ANALYSIS
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39
33
he typical full-scope senior housing market feasibility analysis attempts to reconcile
34
developer-driven project development plans with the expected population of seniors the
35
project’s marketing area is likely to serve. The resulting analysis is limited to a forecast
period of five (5) years – the near-term market window wherein a project would be expected to
be developed, constructed, marketed and operated to a point of reaching a self-sustaining (and
profitable) operating capacity. The long-term window market window is typically not given due
consideration due to the propensity for changing market populations that may be driven by a
T
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
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2
variety of elements and issues that would be expected to skew populations in an unexpected
manner.
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9
Historically, this has meant that market feasibility consultants have relied upon certain
macroeconomic measures to provide anecdotal evidence that would tend to either support or
repudiate the developer’s assumption that the market conditions will continue to provide
sufficient support for the project to warrant investment and development. These anecdotal
measures are important in that consumer choices/actions may be more limited in a given
market if the market population is contracting, the median household income is contracting or
household wealth is not sufficient to support the proposed development.
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11
Exhibit 6: Columnar Chart Distribution of Projected Population by Year by Marketing Area
Geography
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13
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The resulting demographics analysis (the “Macro Analysis”) is set forth in the following subheadings and covers:
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6. Population – Total Population and Population by Age Group.
7. Households – Total Households, Family Households, Non-Family Households, Households by
Age Group and Households by Income.
8. Families – Total Families, Total Families by Age Group and Families by Income.
9. Income & Wealth – Total Household Income, Per Capita Income, Median Household Income,
Disposable Income, Median Disposable Household Income, Total Net Worth, Net Worth by
Age and Median Net Worth.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
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10. Housing – Total Housing Units, Total Owner-Occupied Housing Units, Total Renter-Occupied
Housing Units, Median Housing Unit Values and Housing by Values.
3
Exhibit 7: Distribution of Total Population by Age Group Spreadsheet; Inner Market
4
5
9
10
P O P U L A T I ON S , H O U S E HO L D S & F A M I L I E S I N D I C A T O R S
T
6
he measurement of market populations, household counts and family counts provides
7
insight into both the current household demographics that would demonstrate the depth
8
of current demand that may exist for the benefit of the developer’s proposal, but these
measurements may also provide evidence as to the potential impact the next generation may
have on the long-term market prospects of the site.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
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Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 8: Chart Presentation of Projected Households by Age Group by Reporting Year; Inner
Market Area
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RMC’s analysis included the following elements:
11. Population. Changes in the total population of the area and changes in certain sub-groups
within the total population serve as bellwethers for the overall health of the local economy
that would be expected to support the development of the property. The most important
population age groupings that are important for the purposes of this Report are:
11.1.
Adult Children. The Total Population Aged 45-64 represents a secondary level of
market support that would not otherwise be reflected in a demand analysis based upon
picking the primary demographic profile of the prototypical consumer/end-user for
senior housing income-producing commercial real estate properties. This secondary
level of market support consists of two (2) components: participation in the placement
decision-making process (especially for demented elders or where the senior’s funding
resources are insufficient for living expenses); and, providing the demand for sustaining
long-term occupancy prospects of the proposed project as citizens in this Adult
Children age bracket continue to age in place. The Adult Children Population is further
delineated into the following sub-categories:
11.1.1. Populations Aged 45-49. The Current Year Population Age 45-49 is estimated at
71,363 for 2010, is expected to contract at the rate of (1,395)people per annum
over the forecast window to 64,386 people (an annual growth rate of -1.96% vs.
the 0.45% national rate) by the end of 2015 (note chart on previous page). This
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
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Burlington, Texas Sub-Market Senior Housing Industry Report
population is part of a larger grouping known as the Adult Children cohort
grouping that serves to provide secondary resident market support within a given
geographical operating market area that includes Population Aged 45-64 (below).
11.1.2. Populations Aged 50-54. The Current Year Population Aged 50-54 is estimated
at 64,974 for 2010, is expected to
expand at the rate of 296 people per
annum over the forecast window to
66,454 people (an annual growth rate
TO THE EXTENT POPULATION
of 0.46% vs. the 2.00% annual national
GROWTH
OUTPACES
THE
growth rate for this age group) by the
NATIONAL
AVERAGES,
THIS
end of 2015.
HIGHER THAN AVERAGE GROWTH
11.1.3. Populations Aged 55-59.
The
RATE WOULD SUGGEST A STRONG
Current Year Population Aged 55-59 is
AND GROWING UNDERLYING
estimated at 54,530 for 2010, is
LOCAL MARKET ECONOMY THAT
expected to expand at the rate of
WOULD TEND TO SUPPORT
1,224 people per annum over the
ADDITIONAL INCOME-PRODUCING
forecast window to 60,652 people (an
REAL PROPERTY DEVELOPMENTS .
annual growth rate of 2.25% vs. the
3.50% annual national growth rate for
this age group) by the end of 2015.
11.1.4. Populations Aged 60-64. The Current Year Population Aged 60-64 is estimated
at 44,200 for 2010, is expected to expand at the rate of 1,193 people per annum
over the forecast window to 50,164 people (an annual growth rate of 2.70% vs.
the 4.48% annual national growth rate for this age group) by the end of 2015.
11.2.
Seniors. The Total Population Aged 65 and Older represents the primary pool of
prospects that would be expected to populate the proposed senior housing project
over the near-term forecast window. The Total Population Aged 65 and Older is further
delineated into the following sub-categories:
11.2.1. Populations Aged 65-69. The Total Population Aged 65-69 is part of the
“Youngest-Old” (Total Population Aged 65 to 74) cohort grouping having a Current
Year Population Aged 65-69 estimated at 31,025 people for 2010, is expected to
expand at a rate of 1,992 people per annum over the forecast window to 40,984
people (an annual growth rate of 6.42% vs. the 4.27% annual national growth rate
for this population grouping) by the end of 2015.
11.2.2. Populations Aged 70-74. The Total Population Aged 70-74 is part of the
Youngest-Old cohort grouping having an estimated 23,207 people for 2010, is
expected to expand at a rate of 1,009 people per annum over the forecast window
to 28,251 people (an annual growth rate of 4.35% vs. the 2.04% annual national
growth rate for this age group) by the end of 2015.
11.2.3. Populations Aged 75+. The Total Population Aged 65-69 is part of the “OldestOld” (Total Population Aged 75+) cohort grouping having a Current Year
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
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Population Aged 75+ estimated at 19,074 people for 2010, is expected to expand
at a rate of 247 people per annum over the forecast window to 20,063 people (an
annual growth rate of 0.50% vs. the 1.42% annual national growth rate) by the end
of 2015.
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6
7
8
RMC’s conclusion pertaining to the population sub-sets for the primary marketing area is that
these populations are consistent with those populations in other markets wherein there was
consistent entrenched demand for senior housing of a nature that supported new construction
over the long-term market window.
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10
Exhibit 9: Bar Chart Presentation of Distribution of Current Year/5-Year Households by Age
Group by Expected Annual Growth Rate
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11.3.
Households. The population residing within the primary marketing area is
enclosed within the “Households” demographic grouping. Households are delineated
into “Family Households” (households where the residents are related by blood or
marriage) and “Non-Family Households” (households where the residents are not
related by blood or marriage). Changes in the number of households within a given
market area demonstrate potential for future demand based upon the theory that a
growing market population will also increase its household wealth and income at
approximately the same rate and this often the case. Of particular interest will be the
households where the householder is age 45 or older as these households (up to age
65) represent the secondary market pool of future residents. Households where the
householder is a senior aged 65 or older are the primary pool of near-term resident
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
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prospects. The following household age group counts (Inner Market Area PMA) were
presented for analysis:
11.3.1. Households Aged 45-54. There were
75,499 Current Year (2010) estimated
GROWTH
OF
Households Aged 45-54 in the primary THE
marketing area.
This category of HOUSEHOLDS - AND TO A
Households is expected to contract at a rate LESSER EXTENT, FAMILIES –
ADDITIONAL
of -0.92% per annum (vs. the 0.96% per PROVIDES
annum national growth rate for this cohort ANECDOTAL EVIDENCE AS TO
grouping) totaling some (696)households THE HEALTH AND PROSPECTS
per annum over the next five (5) years to OF THE PROPOSED NEW
72,020 Total Households Aged 45-54 at the CONSTRUCTION BASED UPON
THE UNDERLYING ECONOMIC
end of 2015 (note chart exhibit below).
11.3.2. Households Aged 55-64. There were CONDITIONS OF THE MARKET.
33
34
35
36
RMC’s conclusion pertaining to the household population sub-sets for the primary
marketing area is that these sub-sets are consistent with those sub-sets of other senior
housing project development programs that found the resulting market niche to be
sustainable in the near-term and long-term market windows.
55,296 Current Year (2010) estimated
Households Aged 55-64 in the primary marketing area. This category of
Households is expected to expand at a rate of 2.23% per annum (vs. the 3.64% per
annum national growth rate for this cohort grouping) totaling some 1,234
households per annum over the next five (5) years to 61,466 Total Households
Aged 55-64 at the end of 2015.
11.3.3. Households Aged 65-74. There were 31,885 Current Year (2010) estimated
Households Aged 65-74 in the primary marketing area. This category of
Households is expected to expand at a rate of 5.31% per annum (vs. the 3.01% per
annum national growth rate for this cohort grouping) totaling some 1,693
households per annum over the next five (5) years to 40,349 Total Households
Aged 65-74 at the end of 2015.
11.3.4. Households Aged 75+. There were 28,156 Current Year (2010) estimated
Households Aged 75+ in the primary marketing area. This category of Households
is expected to expand at a rate of 0.25% per annum (vs. the 1.36% per annum
national growth rate for this cohort grouping) totaling some 69 households per
annum over the next five (5) years to 28,502 Total Households Aged 75+ at the
end of 2015.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
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Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 10: Distributions of Families by Family Income by Reporting Year Spreadsheet; Inner
Market Area
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11.4.
Families. Families typically account for the majority of households. The growth
of families within a given geographical marketing area provides anecdotal evidence of
market support based upon the maturation of the underlying workers’ productivity and
earnings potential that, in the United States, are intrinsic to the creation of family
wealth. A comparatively strong earnings growth potential for a given market will
inevitably impact area senior housing properties because senior housing is a privatepay market. This leads to the discussion of family incomes and wealth:
11.4.1. Out of the 356,638 in Total Households, there are 226,138 Family Households
estimated for the Current Year (2010). The Family Households are expected to
grow by 1,494 families per annum to a total of 233,606 Family Households over
the forecast period. This represents an annual growth rate of 0.66% versus the
1.07% annual national growth rate for all U.S. Families for the same period.
11.4.2. The Current Year Median Family Income is estimated at $57,696 versus the
Current Year Median Family Income for the entire U.S. market of $63,907. The
local market Median Family Income is expected to expand over the next five years
to $63,858 (a growth rate of 2.14% per annum vs. the national growth rate of
3.53% to an expected U.S. Median Family Income of $75,173 for 2015).
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22
RMC’s conclusion pertaining to the analysis of certain sub-sets of family households for the
primary marketing area is that these sub-sets are consistent with those sub-sets pertaining
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
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to other senior housing project development programs that found the resulting market
niche to be sustainable in the near-term and long-term market windows.
3
I N C O M E & W E AL T H I N DI C AT O R S
T
7
8
4
he distribution of household income, disposable household income and net worth for
5
Households Aged 45+ is of critical importance in the determination of both near-term
6
new construction demand as well as long-term new construction demand for all classes
of senior housing living units, including independent living, assisted living and dementia assisted
living care programs and projects.
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10
11
12
Household Income is recorded based upon the surveyed findings of the Year 2000 decennial
census, the Current Year (2010) estimated distribution of household incomes by age group and
the projected 5-Year forecasted distribution of household income (net worth and disposable
incomes can only be measured on a Current Year basis).
13
Exhibit 11: Distribution of Households by Age by Income Spreadsheet; Inner Market Area
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Of particular interest are the household incomes measured for the age groups that are at least
$75,000 because Households Aged 75+ would theoretically require a Current Year Household
Income of at least $75,000 in order to offset the costs of living at a senior housing facility at the
independent living facility program level because; seniors are expected to utilize up to 70% of
their household income to pay for housing and lifestyle management activities. On this basis,
the $75,000 household income minimum represents support for up to $3,000 per month in ILF
program fees – a demographic touchstone that RMC would expect to be supported in most
North American markets. In terms of the overall strength of the underlying Age 75+
demographic, the Average Household Income is the first level of support that is reviewed, to
wit:
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
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12. Households Aged 75-79: The Current Year Average Household Income for this cohort was
recorded as $48,448 for the Inner Market Area, suggesting up to $2,826 per household, per
month of senior housing “buying power” is being demonstrated for this cohort grouping. In
all, there are 2,179 households of this age grouping having Current Year Household Incomes
of $75,000 or more.
6
7
Exhibit 12: 5-Year Distribution of Households by Age by Income Spreadsheet; Inner Market
Area
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13. Households Aged 80-84: The Current Year Average Household Income for this cohort was
recorded as $43,388, suggesting up to $2,531 per household, per month of senior housing
buying power is being demonstrated for this cohort grouping. In all, there are 1,334
households of this age grouping having Current Year Household Incomes of $75,000 or
more.
14. Households Aged 85+: The Current Year Average Household Income for this cohort was
recorded as $43,587, suggesting up to $2,543 per household, per month of senior housing
buying power is being demonstrated for this cohort grouping. In all, there are 1,340
households of this age grouping having Current Year Household Incomes of $75,000 or
more.
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The next level of analysis focuses on the “true buying power income” of the Senior Households
and Adult Children Households; the Current Year Household Disposable Income. Disposable
household income measures the given household’s (or grouping of households’, as the case may
be) after tax buying power – the only real income the household would have available to offset
the living expenses associated with residency in a group quarters senior housing facility (ILF,
ALCF, ALZ/ALCF, etc.). Disposable income is only measured on a Current Year basis because the
future impact of taxation policies are not known until the total household income is also known.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
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Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 13: Distribution of Households by Disposable Income by Age Spreadsheet; Inner
Market Area
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4
5
6
The disposable income analysis is stratified for both the near-term primary user profile cohort
(i.e.: Households by Age Group 65+) and the long-term primary user cohort and secondary
payment source profile cohort (i.e.: Adult Children Households by Age 45-64), to wit:
7
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15. Median Household Disposable Income/Households Aged 45-54: was measured as $50,121
for a total of 75,499 households, while the number of households having disposable
incomes of at least $100,000 per annum for this age group was recorded as 10,193
households and the number of households for this age group having disposable incomes of
at least $150,000 per annum was record as 3,476 households.
16. Median Household Disposable Income/Households Aged 55-64: was measured as $44,874
for a total of 55,296 households, while the number of households having disposable
incomes of at least $100,000 per annum for this age group was recorded as 6,985
households and the number of households for this age group having disposable incomes of
at least $150,000 per annum was record as 2,462 households.
17. Median Household Disposable Income/Households Aged 65-74: was measured as $33,901
for a total of 31,885 households for this age group. The total number of households with
disposable incomes of at least $50,000 per annum recorded as 10,545 households, while the
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
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total number of households for this age group with disposable incomes of at least $75,000
per annum was recorded as 4,724 households.
18. Median Household Disposable Income/Households Aged 75+: was measured as $26,938 for
a total of 28,156 households for this age group. The total number of households with
disposable incomes of at least $50,000 per annum recorded as 7,148 households, while the
total number of households for this age group with disposable incomes of at least $75,000
per annum was recorded as 3,125 households.
8
9
Exhibit 14: Bar Chart Comparison of Distribution of Median Household Income by Age Group;
Inner Market Area vs. U.S. National Market
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21
The final measure of household wealth is the estimated Current Year Net Worth. Net worth
measurements provide anecdotal evidence as to the depth of support a given geographical
marketing area may in fact be able to provide with respect to the calculation of entry-fee price
points for entry-fee CCRCs and entry-fee lifestyle amenity property development programs.
Historically, the youngest-old have been willing to (on average) liquidate up to half of their net
worth for the purposes of paying the required entry fee at a senior community, while the oldestold senior households have been willing to liquidate nearly all of their estates to pay for both
residency and health care services. By the same token, Adult Children Households have been
willing to provide a much smaller percentage of their household wealth for the purposes of
providing payment for an elder’s entry fee requirement in order to have the family member
migrate to the Adult Child’s area and take up residency.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
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Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 15: Current Year Household Net Worth; Inner Market Area
2
3
4
5
6
There were 356,638 households in the Inner Market Area surveyed and the Median Household
Net Worth for these householders was estimated at $47,825 for the Current Year.
Approximately 76,871 of these households had a net worth of at least $250,000, while 44,048
households had a net worth estimated to be at least $500,000.
7
8
9
Net worth measurements for Adult Children Households, Senior Households and their
associated impact in terms of demonstrating additional anecdotal evidence of support for new
living unit construction were as follows:
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19. Households Aged 45-54/Current Year Net Worth: the “youngest” Adult Children Households
recorded a Median Household Net Worth of $78,660 for 75,499 total households for the age
group, suggesting the top 50% - some 37,750 households having at least $78,660 in net
worth available to help offset senior housing care costs for a senior family member.
Approximately 19,208 households for this age group have a net worth in excess of $250,000.
Historically, the youngest Adult Children Households have sharply limited the availability of
net worth for payment of entry-fees, meaning there would be an empirical
assumption/expectation of no more than ten percent (10%) of the total household’s net
worth that would be made available for the payment of an entry-fee for a senior family
member. Using the Median Household Net Worth as a baseline, this would suggest that a
minimum of $7,866 would be available and added to the baseline entry-fee computation
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
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pertaining to senior households based upon a basket of the top 50% of the youngest Adult
Children Households.
3
Exhibit 16: Pie Chart of Housing Occupancy by Occupant Type Distribution; Inner Market Area
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20
20. Households Aged 55-64/Current Year Net Worth: the “oldest” Adult Children Households
recorded a Median Household Net Worth of $139,826 for a total of 55,296 households for
the age group, suggesting the top 50% - some 27,648 households having at least $139,826 in
net worth available to help offset senior housing care costs for a senior family member.
Approximately 19,605 households for this age group have a net worth in excess of $250,000.
Historically, Adult Children Households have limited the availability of net worth for
payment of entry-fees, meaning there would be an expectation of no more than twenty
percent (20.00%) of the total household’s net worth that would be made available for the
payment of care and housing costs of a senior family member. Using the Median Household
Net Worth as a baseline, this would suggest that approximately $27,965 would be available
and added to the baseline entry-fee computation pertaining to senior households based
upon a basket of the top 50% of the oldest Adult Children Households. In all, Adult Children
Net Worth measurements demonstrate a total of $35,831 per unit in additional entry-fee
pricing support for the entry-fee CCRC market segment – or an imputed $4,299,744 in
potential capital financing being present for said entry-fee CCRC project capital financing
structure.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
28
October 2010
1
Burlington, Texas Sub-Market Senior Housing Industry Report
H OUSI N G ST OC K
A
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
2
cursory examination of the housing stock
3
(both single-family housing and multifamily
4
housing stocks) was undertaken in order to
THE MARKET DIVIDES HOUSING
provide a basis for determining the potential price
OCCUPANCY
INTO
OWNERpoints for entry-fee independent living facility new
OCCUPIED, RENTER-OCCUPIED AND
construction programs. Historically, entry fees were
VACANT
HOUSING
UNITS.
calibrated solely based upon the developer’s capital
GENERALLY
SPEAKING,
ANY
finance plan requirements and project development
VACANCY RATE OF LESS THAN 10%
IS CONSIDERED EVIDENCE OF
yield requirements. This approach worked as long as
ENTRENCHED DEMAND FOR NEW
there were large-scale in-fill property development
HOUSING CONSTRUCTION THAT
opportunities available to the developer where there
WOULD INCLUDE SENIOR HOUSING
was significant entrenched demand for the
LIVING UNITS CONSTRUCTION.
development of new senior housing stocks that
would support entry fees in the $500,000+ class,
allowing senior housing developers to go for the “cream of the market”. By the end of the mid‘90’s this practice had largely come to an end as more and more publicly-traded senior housing
companies developed more and more senior housing throughout North America – to a point
where it was no longer advisable or practical to use arbitrary entry-fee pricing for CCRCs and
other entry-fee communities. The practice of developing high-end CCRC properties is now
limited to a decreasing base of destination-class locations and properties.
22
23
The first area of inspection of the housing stock will be the occupancy rates and it will be
followed by a housing price matrix analysis.
24
25
The estimated market occupancy for the proposed Project Site is divided into three (3) basic
classes (note chart exhibit on previous page):
26
27
28
29
30
31
Owner Occupied – a total annual average of 47.0% of dwellings (some 200,164 housing
units: Inner Market Area) are expected to be occupied by their owners of record.
Renter Occupied – a total annual average of 36.7% of dwellings (some 156,474 housing
units) are expected to be occupied by renters.
Vacant Units – a total annual average of 16.3% of dwellings (some 69,453 housing units)
are expected to be vacant this year.
32
33
34
35
36
37
38
39
This analysis is based upon a housing development forecast that estimates there are 426,091
units of housing in the housing inventory for the Current Year (Inner Market Area). This stock is
expected to increase at a rate of 1.63% per annum (some 6,947 new housing units each year) to
460,826 total housing units by the end of 2015. These gains in housing units suggest a total
penetration rate of 3.45% being required in any one (1) 12-month period in order to fill the
prototypical 240-unit ILF program to full capacity. The current market occupancy of 83.7% is
expected to fall somewhat to 80.9% over the near-term forecast period. Tightening market
occupancies provide further anecdotal evidence support as to the demand for housing (in
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
29
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
1
2
general) within a given marketing area, while falling occupancy trends reflect a market that
would not be expected to show support for new housing construction demand.
3
Exhibit 17: Housing Stock Analysis by Price Bracket; Inner Market Area
4
5
6
7
8
9
RMC uses a demand model that bases the entry-fee price range based upon the following
factors:
Measurements of Senior Household Income.
Measurements of Senior Household Net Worth.
Measurements of Market Pricing for Housing Stock.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
30
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
1
2
3
4
5
6
7
8
9
Senior household income and net worth measurements are discussed above (see page 23). The
distribution of household net worth is important to the calculation of potential entry-fee price
points because a senior household typically liquidates their household net worth in order to pay
for their end of life care and housing needs (such as is commonly found in senior housing
properties). This means that consideration has to be given to both the entry-fee payment and
the ongoing monthly basic services rental fees and additional services fees the senior consumer
would be expected to be able to pay. This leads to certain empirical assumptions that must be
made based upon the practical experience of the senior housing industry being applied to the
various classes of senior housing, to wit:
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Entry-fee ILFs – a senior resident can be expected to use up to 70% of their disposable
household income to pay for room, board, utilities and lifestyle management requirements
(i.e.: IADL support with transportation services added) that are in addition to the payment of
the entry-fee. Furthermore; the nature of the contract between the property and the
resident has to be given consideration with respect to the use of the entry-fee (as prepaid
rent, as to its potential for being refunded to the senior and as to whether or not a portion
will be applied to the future care requirements of the senior ala’ life care).
Rental ILFs – a senior resident can be expected to expend up to 75% of their disposable
household income to pay for room, board, utilities and lifestyle management requirements
as would be offered at the prototypical independent living property in the market today.
Rental ALCFs – a senior resident can be expected to expend up to 80% of their disposable
household income to pay for room, board, utilities, lifestyle management requirements and
self-care requirements as would be offered at the prototypical assisted living facility
property in the market today.
Rental ALZ/ALCFs – a senior resident can be expected to expend up to 90% of their
disposable household income to pay for room, board, utilities, lifestyle management
requirements, supervision and self-care requirements as would be offered at the
prototypical secured dementia care assisted living property in the market today.
28
29
30
31
32
33
The entry-fee must be computed based upon assumptions as to the consumer market’s
responsiveness to the offered housing. This means the property has to have a readily
addressable pricing model that reflects the expectations of the surrounding area. Accordingly,
the median price of housing units becomes the basis for entry-fee price points and is then
compared to the median net worth of senior households to determine any variances. The
results are typically averaged to come up with a composite median entry-fee price schedule.
34
35
36
37
38
39
40
As discussed above, the Current Year Median Household Net Worth for Households Aged 75+
was reported as $158,696 for the Inner Market Area (a total of 28,156 Age 75+ Households),
$161,003 for the Middle Market Area (a total of 39,194 Age 75+ Households) and $169,319 for
the Outer Market Area (a total of 51,290 Age 75+ Households). Assuming a 60% expense
rate/ratio, these findings suggest a minimum entry-fee price within a range of $95,218, plus the
$35,831 in Adult Children related entry-fee price support to produce an adjusted minimum
entry-fee of $131,049 (having an imputed starting living unit NRSF of 537 square feet for the
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
31
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
1
2
studio or 1-bedroom unit class) for the market. This finding suggests underlying market support
does exist for the entry-fee business model in this geographical primary marketing area.
3
All other analyses of macro indicators were beyond the scope of this Report.
4
SITE-BASED SENIOR HOUSING NEW CONSTRUCTION DEMAND ANALYSIS
8
9
5
he next step in the process was to create a series of spreadsheets that incorporated the
6
general demographic data into specific demand models that correspond to the four (4)
7
classes of senior housing. This process resulted in discrete demand model spreadsheets
being prepared for all four (4) classes of senior housing at each level of market geography for a
total of 12 spreadsheets.
10
11
12
13
14
For the purposes of document organization and brevity, the demand models for the most
conservative market geography – the Inner Market Area – are presented in the following subsections while the demand model spreadsheets for the Middle Market Area and the Outer
Market Area are catalogued in the Appendix Section (see spreadsheets starting on page 70 in
the Appendix Section).
15
16
17
In addition to the presentation of the spreadsheets, a technical discussion is provided as to the
screening methodologies employed for each of the four (4) classes of senior housing is set forth
in each corresponding sub-heading under this title.
18
19
T
A G E - RE S T R I C T E D R EN T AL M U L T I F A M I L Y
H O U S I N G N E W C O N ST R U C T I O N D E M A N D
R
24
25
26
27
28
29
30
31
32
33
34
35
20
MC uses a statistics-based demand model
21
for the purposes of forecasting the demand
22
for to-be-built multifamily housing units
23
(apartments) that do not offer the bundled
daily living services that are commonly associated
with the independent living facility programs that
represent the first true step into the continuing of
care chain of senior housing. In this particular case,
RMC’s model represents the demand for agerestricted rental apartment new construction
demand that would be expected to be sustained by
the local market area seniors. Age-restricted rental
multifamily housing communities focus on the
creation of multifamily housing that provides
physical amenity-based benefits to residents as
opposed to the independent living facility approach
IADLS ARE THE MEASURE OF
EVERYONE’S CURRENT LIFESTYLE
MANAGEMENT ABILITIES AND
DISABILITIES.
THE
NEW
CONSTRUCTION DEMAND MODEL
FOR ILF PROJECTS IS BASED UPON
THE ASSUMPTION THAT SENIORS
WHO ARE UNABLE TO MANAGE
THEIR LIFESTYLES WILL BE AT THE
GREATEST RISK FOR NEEDING
HOUSING
AND
LIFESTYLE
MANAGEMENT SUPPORT (IADL
SUPPORT) AS WOULD BE FOUND
IN A SENIOR HOUSING ILF
PROGRAM.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
32
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
1
2
3
that uses both physical amenities and bundled services. Accordingly, the resulting demand
model uses a 5-step screening methodology in order to project the net buildable demand for
the market at all three (3) levels of assumed catchment area geography that take into account:
4
5
6
7
8
Age and Income – ability to pay and qualifying age. For the purposes of generating an
initial analysis that would be reasonably considered to be conservative in nature by an
institutional investor, the universe of records was limited to Households Aged 75+ that
also had current/projected household incomes of at least $25,000 per annum, but not
greater than $50,000.
9
Exhibit 18: Age-Restricted Rental Multifamily Demand Spreadsheet; Inner Market Area
10
11
12
13
14
15
16
17
18
19
IADL Disability Rates – those senior households requiring assistance with certain
activities that tend to make the household more likely to consider living in a group
quarters housing setting. The pool of income and age qualified cohorts is reduced to
that pool of cohorts that would be theoretically age qualified, income qualified and
report have problems performing two (2) or more IADLs per day that required
assistance from another person. This factor (20.7% for the Population Aged 75+) was
gleaned from the Centers For Disease Control (CDC), National Institute of Health (NIH)
report entitled, “Health Data On Older Americans: 1992,” that is the benchmark for
positing demand for group quarters housing occupancy.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
33
October 2010
1
2
3
4
5
6
7
8
9
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27
Burlington, Texas Sub-Market Senior Housing Industry Report
Adult Children Households – the impact of adult children moving seniors into their
corresponding area (in-migration). The pool of age, income and disability qualified
cohorts is modified to reflect the potential impact of high income Adult Children
Households. The demand model empirically assumes that one percent (1.00%) of the
total pool of Adult Children Households with Disposable Household Incomes of
$150,000+ for the Youngest Adult Children Households (Households Aged 45-54) and
$200,000 for the Oldest Adult Children Households (Households Aged 55-64) will in fact
move a senior family member to a facility within the marketing area. This result is then
added to the previous screen to determine the Gross Demand pool.
Competition – the impact existing and future competing properties would be expected
to place upon the program. The pool of qualified cohorts is then reduced to provide
reconciliation for the portion of the Gross Demand being drained from the pool to fill
current, planned and proposed dementia assisted living care facilities being operated by
competitors within the primary marketing area. The demand model empirically
assumes that 33% of the Gross Demand will in fact be accounted for by competing
facilities. Historically, RMC has found that this assumed level of competitive pressure
has – in most markets – over-quantified the actual identifiable competitive demand. In
the case of this analysis, the demand model assumes that 2,085 units to 4,002 units
(variance based upon assumed market area geographies) will be accounted for by
competing interests with the result being the Net Demand pool that would include an
allocation of Gross Demand for the expected replacement of typical property turnover
losses of residents. It is from this pool that the new facility will (theoretically) be able to
draw new residents once all competing properties are theoretically filled to 100%
operating capacity at all times over the near-term forecast window
Penetration – the resulting pool is then given consideration in terms of the realistic
number of households that would in fact be available for relocation to the proposed
project.
28
The results of the analysis were:
29
30
31
32
33
34
35
36
37
21. For the Inner Market Area, the expected Net Buildable Demand for the Current Year was
computed to be 635 living units per annum and is expected to expand to 641 units per
annum by the end of the Forecast Period; and
22. For the Middle Market Area, the expected Net Buildable Demand for the Current Year was
computed to be 902 living units per annum and is expected to expand to 918 units per
annum by the end of the Forecast Period; and
23. For the Outer Market Area, the expected Net Buildable Demand for the Current Year was
computed to be 1,219 living units per annum and is expected to expand to 1,256 units per
annum by the end of the Forecast Period.
38
39
E N T R Y - F E E I N D E P E N DE N T L I V I N G F A C I L I T Y N E W C O N S T R U C T I ON D E M A N D
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
R
4
5
6
7
8
9
10
11
1
MC uses a demand model for the purposes of forecasting the demand for to-be-built
2
senior housing living units at the entry-fee based independent living facility program
3
level that relies on established industry benchmarks that takes into account the ability to
pay requirement and the need requirement for the housing program model (the “Entry-Fee
Demand Analysis”). The purpose of the Entry-Fee Demand Analysis is to determine the
marketing area’s intrinsic entry-fee price support as entry-fee ILFs are almost always part of a
CCRC, so the both the lease rate (i.e.: the basic services fee – the ongoing “rental” portion of the
contract between property and resident) and entry-fee pricing must be given consideration.
The Entry-Fee Demand Analysis uses five (5) basic screens in order to derive the total Net
Demand and the penetration rate that would be required based upon an assumed range of total
property living units. The result of this analysis found:
12
13
14
15
16
17
18
19
24. For the Inner Market Area – a total of 2,040 units of Net Demand are forecasted for the
most likely year of entry into the market (2010) at this level of geography. Assuming a
10.00% optimal penetration rate, the total Current Year Net Buildable ILF New Construction
Demand would be no more than 204 units.
25. For the Middle Market Area – a penetration rate of 7.52% would be required to lease-up all
204 units of Net Buildable Demand at this level of market geography.
26. For the Outer Market Area. A penetration rate of 5.41% would be required to lease-up all
204 units of Net Buildable Demand at this level of market geography.
20
21
22
The screening methodology used for the purposes of completing a technical analysis of this
marketing area’s potential for new entry-fee independent living facility housing construction
was determined using the following demand model methodology:
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
27. Age & Net Worth Screen. The universe of records was reduced to that pool of records that
corresponds to Households Aged 65+ that also have Current Year Household Net Worth
estimated to be $250,000 per annum or more. The operative theory being that 75% of the
facility’s routine sales revenues will be found within the facility’s primary marketing area.
The nature of the analysis requires empirical assumptions being made as to the likely
geographical primary marketing area boundaries to provide additional levels of demand
analysis beyond what is, more or less, the standard industry benchmark. In the case of each
spreadsheet analysis, all other records were excluded from the universe of households that
do not meet the net worth and age requirements. There were an estimated 23,460
Households Aged 65+ within the market (Inner Market Area) for the Current Year that had
the qualifying household net worth of at least $250,000. The Entry-Fee Demand Analysis
model empirically assumes these household counts will increase at an annual rate equal to
the average annual rate of increase for all households within each of the three (3) marketing
area geographies; then
28. IADL Disability Screen. The pool of income and age qualified cohorts is reduced to that pool
of cohorts that would be theoretically age qualified, income qualified and report have
problems performing two (2) or more IADLs per day that required assistance from another
person. This factor (6.6% for Population Aged 65-74 and 20.7% for the Population Aged
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
35
October 2010
1
2
3
4
Burlington, Texas Sub-Market Senior Housing Industry Report
75+) was gleaned from the Centers For Disease Control (CDC), National Institute of Health
(NIH) report entitled, “Health Data On Older Americans: 1992,” that is the benchmark for
positing demand for group quarters housing occupancy; then
Exhibit 19: Entry-Fee ILF Demand Analysis Spreadsheet; Inner Market Area
5
6
7
8
9
10
11
12
13
29. Adult Children In-Migration. The pool of age, income and disability qualified cohorts is
modified to reflect the potential impact of high income Adult Children Households. The
demand model empirically assumes that one percent (1.00%) of the total pool of Adult
Children Households with Disposable Household Incomes of $150,000+ for the Youngest
Adult Children Households (Households Aged 45-54) and $200,000 for the Oldest Adult
Children Households (Households Aged 55-64) will in fact move a senior family member to a
facility within the marketing area. This result is then added to the previous screen to
determine the Gross Demand pool; then
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
36
October 2010
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Burlington, Texas Sub-Market Senior Housing Industry Report
30. Changes in Demand Due to Competition. The pool of qualified cohorts is then reduced to
provide reconciliation for the portion of the Gross Demand being drained from the pool to
fill current, planned and proposed dementia assisted living care facilities being operated by
competitors within the primary marketing area. The demand model empirically assumes
that 33% of the Gross Demand will in fact be accounted for by competing facilities.
Historically, RMC has found that this assumed level of competitive pressure has – in most
markets – over-quantified the actual identifiable competitive demand. In the case of this
analysis, the demand model assumes that 1,005 units to 1,859 units (variance based upon
assumed market area geographies) will be accounted for by competing interests with the
result being the Net Demand pool that would include an allocation of Gross Demand for the
expected replacement of typical property turnover losses of residents. It is from this pool
that the new facility will (theoretically) be able to draw new residents once all competing
properties are theoretically filled to 100% operating capacity at all times over the near-term
forecast window; then
31. Penetration Rates. The most important measure is the penetration rate for the most likely
catchment area in order to fill a new facility to 100% occupancy in any given 12-month
period of the near-term forecast window. These are listed as a spread of licensed facility
beds and given for additional years beyond the most likely entry year.
19
20
21
22
23
24
25
RMC’s analysis of the demographics information
finds the primary marketing area does in fact
exhibit support for the construction of new
senior housing programs at the ILF level,
including entry fee senior housing programs that
warrants a field investigation to confirm these
findings.
26
R E N T A L I N D E P E N D E N T LI V I N G F A C I L I T Y
N E W C O N S T R UC T I O N D E M A N D
27
THE NET BUILDABLE DEMAND
FOR
RENTAL
ILF
NEW
CONSTRUCTION DEMAND WAS
MEASURED AS 159 UNITS AT THE
INNER MARKET, 211 UNITS AT
THE MIDDLE MARKET AND 460
UNITS AT THE OUTER MARKET.
R
31
32
33
34
28
MC uses a demand model for the purposes
29
of forecasting the demand for to-be-built senior housing living units for rental
30
independent living facility programs. This demand model incorporates an established
industry benchmark that takes into account the ability to pay requirement and the need
requirement for the housing program model (the “ILF Demand Analysis”). The ILF Demand
Analysis uses five (5) basic screens in order to derive the total Net Demand and the penetration
rate that would be required based upon assumed property sizes.
35
The result of this analysis found:
36
37
38
39
32. For the Inner Market Area – a total of 1,587 units of Net Demand are forecasted for the
most likely year of entry into the market (2010) at this level of geography. Assuming a
10.00% optimal penetration rate, the total Current Year Net Buildable ILF New Construction
Rental Unit Demand would be no more than 159 units for the Current Year.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
1
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 20: Rental ILF Demand Analysis Spreadsheet; Inner Market Area
2
3
4
5
6
33. For the Middle Market Area – a penetration rate of 7.54% would be required to lease-up all
159 units of Net Buildable Demand at this level of market geography for the Current Year.
34. For the Outer Market Area. A penetration rate of 3.45% would be required to lease-up all
159 units of Net Buildable Demand at this level of market geography for the Current Year.
7
8
9
The screening methodology used for the purposes of completing a technical analysis of this
marketing area’s potential for new rental independent living facility housing construction was
determined using the following demand model methodology:
10
11
12
13
35. Age & Income Screen. The universe of records was reduced to that pool of records that
corresponds to Households Aged 65+ that also have Current Year Household Disposable
Income estimated to be $50,000 per annum or more. All other records were excluded.
There were an estimated 18,608 Households Aged 65+ within the market (Inner Market
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
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2
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7
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23
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25
26
27
28
29
30
31
32
33
36.
37.
38.
39.
Burlington, Texas Sub-Market Senior Housing Industry Report
Area) for the Current Year that had the qualifying household disposable household income
of at least $50,000. The ILF Demand Analysis model empirically assumes these household
counts will increase at an annual rate equal to the average annual rate of increase for all
households within each of the three (3) marketing area geographies; then
IADL Disability Screen. The pool of income and age qualified cohorts is reduced to that pool
of cohorts that is age qualified, income qualified and theoretically have problems
performing two (2) or more IADLs per day that require assistance from another person. This
factor (6.6% for Population Aged 65-74 and 20.7% for the Population Aged 75+) was gleaned
from the Centers For Disease Control (CDC), National Institute of Health (NIH) report
entitled, “Health Data On Older Americans: 1992,” that is the benchmark for positing
demand for independent living facility living unit occupancy (group quarters housing); then
Adult Children In-Migration. The pool of age, income and disability qualified cohorts is
modified to reflect the potential impact of high net worth Adult Children Households. The
demand model empirically assumes that one percent (1.00%) of the total pool of Adult
Children Households with Disposable Household Incomes of $150,000+ for the Youngest
Adult Children Households (Households Aged 45-54) and $200,000 for the Oldest Adult
Children Households (Households Aged 55-64) will in fact move a senior family member to a
facility within the marketing area. This result is then added to the previous screen to
determine the Gross Demand pool; then
Changes in Demand Due to Competition. The pool of qualified cohorts is then reduced to
provide an accounting for demand being drained from the pool to fill current, planned and
proposed dementia assisted living care facilities being operated by competitors. The
demand model empirically assumes that 33% of the Gross Demand will in fact be accounted
for by competing facilities. Historically, this assumed level of competitive pressure has – in
most markets – over-quantified the actual identifiable competitive demand. In the case of
this analysis, the demand model assumes that 782 units to 2,267 units (again, based upon
assumed catchment area geographies) will be accounted for by competing interests with the
result being the Net Demand pool. It is from this pool that the new facility will
(theoretically) be expected to attract new residents; and
Penetration Rates. The most important measure is the penetration rate for the most likely
catchment area in order to fill a new facility to 100% occupancy in any given 12-month
period of the near-term forecast window. These are listed as a spread of licensed facility
beds and given for additional years beyond the most likely entry year.
34
35
36
37
RMC’s analysis of the rental ILF market potential shows the primary marketing area does in
fact provide definitive evidence of demand for new construction at the ILF program level as
described in the demographics analysis and these findings should be confirmed with a full
field investigation of the primary marketing area.
38
R E N T A L A S S I S T E D L I V I N G C A R E F A C I L I T Y N E W C O N S T R U C T I ON D E M A N D
39
40
RMC uses a demand model for the purposes of forecasting the demand for to-be-built senior
housing living units/beds for rental assisted living programs that incorporates established
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
39
October 2010
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Burlington, Texas Sub-Market Senior Housing Industry Report
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19
industry benchmarks (the “Assisted Living Demand Analysis”). The Assisted Living Demand
Analysis uses five (5) basic screens in order to derive the
total Net Demand and the penetration rate that would
be required based upon assumed property sizes. The
THE TOTAL NET BUILDABLE
result of this analysis found:
DEMAND FOR STANDARD
40. For the Inner Market Area – a total of 831 units of RENTAL ALCF DEVELOPMENT
Net Demand are forecasted for the most likely year PROGRAMS WAS ESTIMATED
of entry into the market (2010). The prototypical 60- TO BE 83 UNITS, 110 UNITS
bed ALCF would require a penetration rate of 7.22% AND 147 UNITS FOR THE
(any penetration rate of less than 15% at this level of INNER, MIDDLE AND OUTER
geography is considered indicative of adequate DRIVE-TIME MARKET AREAS,
demand for new construction) in order to completely RESPECTIVELY.
lease-up the facility. For the purposes of this
analysis, a penetration rate of 10.00% was considered (empirical assumption) as the
baseline available demand for the project – a total of 83 units.
41. For the Middle Market Area – the penetration rate required to fill all 83 units (see above) of
Net Buildable Demand in the Current Year would be 7.53%.
42. For the Outer Market Area – the penetration rate required to fill all 83 units (see above) of
Net Buildable Demand in the Current Year would be 5.66%.
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The screening methodology used for the purposes of completing a technical analysis of this
marketing area’s potential for new assisted living care facility housing was as follows:
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43. Age & Income Screen. The universe of records was reduced to that pool of records that
corresponds to Households Aged 75+ that also have Current Year Disposable Household
Incomes estimated to be $50,000 per annum or more. All other records were excluded.
There were an estimated 7,517 Households Aged 75+ within the market (Inner Market Area)
for the Current Year that had the qualifying household disposable income of $50,000. The
Assisted Living Demand Analysis empirically assumes these households will grow at the
same rate of growth of all households within the marketing area for each subsequent year
of the forecast period; then
44. ADL Disability Screen. The pool of income and age qualified cohorts is reduced to that pool
of cohorts that is age qualified, income qualified and theoretically have problems
performing two (2) or more ADLs per day that require assistance from another person. This
factor (15.7% for the Age 75+ Population) was gleaned from the Centers For Disease Control
(CDC), National Institute of Health (NIH) report entitled, “Health Data On Older Americans:
1992,” that is the benchmark for positing demand for assisted living facility living unit
occupancy; then
45. Adult Children In-Migration. The pool of age, income and disability qualified cohorts is
modified to reflect the potential impact of high-income Adult Children Households. The
demand model empirically assumes that one percent (1.00%) of the total pool of Adult
Children Households with Disposable Household Incomes of $150,000+ will in fact move a
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
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Burlington, Texas Sub-Market Senior Housing Industry Report
senior family member to a facility within the marketing area. This result is then added to
the previous screen to determine the Gross Demand pool; then
Exhibit 21: Rental ALCF Demand Analysis Spreadsheet; Inner Market Area
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46. Changes in Demand Due to Competition. The pool of qualified cohorts is then reduced to
provide an accounting for demand being drained from the pool to fill current, planned and
proposed dementia assisted living care facilities being operated by competitors. The
demand model empirically assumes that 33% of the Gross Demand will in fact be accounted
for by competing facilities. Historically, this assumed level of competitive pressure has – in
most markets – over-quantified the actual identifiable competitive demand. In the case of
this analysis, the demand model assumes that 409 units/beds to 723 units/beds will be
accounted for by competing interests with the result being the Net Demand pool, including
the theoretical requirement of providing an offset for the replacement of usual resident
turnover at all existing facilities. It is from this pool that the new facility will (theoretically)
be able to draw new residents; and
47. Penetration Rates. The most important measure is the penetration rate for the most likely
catchment area in order to fill a new facility to 100% occupancy in any given 12-month
period of the near-term forecast window. These are listed as a spread of licensed facility
beds and given for additional years beyond the most likely entry year.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
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RMC’s analysis of the rental ALCF market potential shows the primary marketing area does
in fact provide definitive evidence of demand for new construction at the assisted living
program level as described in the demographics analysis and these findings should be
confirmed with a full field investigation of the primary marketing area.
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R E N T A L A L Z H E I M E R ’ S A S S I S T E D L I V I N G C A R E F A C I L I T Y N E W C O N ST R U C T I O N
D E MA N D
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MC’s development of a demand model for forecasting the demand for to-be-built senior
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housing living units/beds for dementia assisted living programs originally in 1993;
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becoming the first applicant in Texas to sponsor
a Section 232 SAMA application for a dementia
specialty care unit board & care facility and RMC
THE NET BUILDABLE DEMAND
continues to utilize this forecast methodology to this
FOR ALZ/ALCF NEW FACILITY
day (the “Alzheimer’s Demand Analysis”).
The
CONSTRUCTION WAS
Alzheimer’s Demand Analysis uses five (5) basic screens
MEASURED AS 48 UNITS/BEDS,
in order to derive the total Net Demand and the
66 UNITS/BEDS AND 89
penetration rate that would be required based upon
UNITS/BEDS FOR THE INNER,
assumed property sizes.
MIDDLE AND OUTER DRIVEThe result of this analysis found:
TIME MARKET CATCHMENT
AREAS, RESPECTIVELY.
48. For the Inner Market Area – a total of 477 units of
Net Demand are forecasted for the most likely year
of entry into the market (2010). The prototypical 60-bed stand-alone ALZ/ALCF would
require a penetration rate of 6.29% (any penetration rate of less than 15% at this level of
geography is considered indicative of strong demand for new construction) in order to
completely lease-up the facility. As with the other analysis demand models, the Net
Buildable Demand potential of the property was limited to a penetration rate of 10.00% (at
this Inner drive-time area) that yielded a Total Net Buildable Demand for ALZ/ALCF of 48
units/beds for the Current Year.
49. For the Middle Market Area – a penetration rate of 7.29% would be required in order to
lease-up all 48 units/beds of Total Net Buildable Demand at this level of geography.
50. For the Outer Market Area – a penetration rate of 5.37% would be required in order to
lease-up all 48 units/beds of Total Net Buildable Demand at this level of geography.
Unlike independent living and, to a lesser extent – assisted living properties, Alzheimer’s
care properties have a practical service capacity of approximately 75 beds.
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The screening methodology used for the purposes of completing a technical analysis of this
marketing area’s potential for new dementia assisted living care facility housing was as follows:
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51. Age & Income Screen. The universe of records was reduced to that pool of records that
corresponds to Households Aged 75+ that also have Current Year Disposable Household
Incomes estimated to be $75,000 per annum or more. All other records were excluded.
There were an estimated 3,133 Households Aged 75+ within the market (Inner Market Area)
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
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for the Current Year that had the qualifying disposable household income of at least
$75,000. The number of Age 75+ Households that have disposable incomes in all
subsequent reporting years are empirically assumed to increase at the same rate of increase
that applies to all households within the given marketing area; then
52. Dementia Disability Screen. The pool of income and age qualified cohorts is reduced to that
pool of cohorts that is age qualified, income qualified and theoretically have a diagnosis of a
dementing disorder that induces heavy dementia requiring institutional care. This factor (an
annual incidence rate of 18.4% for the Age 75+ Population) was gleaned from the landmark
Alzheimer’s study by Harvard University/Rush University published in the Journal of the
American Medical Association, May, 1995; then
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Exhibit 22: Rental ALZ/ALCF Demand Analysis Spreadsheet; Inner Market Area
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53. Adult Children In-Migration. The pool of age, income and disability qualified cohorts is
modified to reflect the potential impact of high-income Adult Children Households. The
demand model empirically assumes that one percent (1.00%) of the total pool of Adult
Children Households with Disposable Household Incomes of $150,000+ will in fact move a
senior family member to a facility within the marketing area. This result is then added to
the previous screen to determine the Gross Demand pool; then
54. Changes in Demand Due to Competition. The pool of qualified cohorts is then reduced to
provide an accounting for demand being drained from the pool to fill current, planned and
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
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proposed dementia assisted living care facilities being operated by competitors. The
demand model empirically assumes that 33% of the Gross Demand will in fact be accounted
for by competing facilities. Historically, this assumed level of competitive pressure has – in
most markets – over-quantified the actual identifiable competitive demand because the
model requires an allowance first be made that would theoretically maintain all competing
facilities at 100% occupancy before any other demand is allocated for new construction
programs. In the case of this analysis, the demand model assumes that 159 beds to 296
beds will be accounted for by competing interests with the result being the Net Demand
pool. It is from this pool that the new facility will (theoretically) be able to draw new
residents; and
55. Penetration Rates. The most important measure is the penetration rate for the most likely
catchment area in order to fill a new facility to 100% occupancy in any given 12-month
period of the near-term forecast window. These are listed as a spread of licensed facility
beds and given for additional years beyond the most likely entry year.
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RMC’s analysis of the rental ALZ/ALCF market potential shows the primary marketing area does
in fact provide definitive evidence of demand for new construction at the dementia care
assisted living program level as described in the demographics analysis and these findings
should be confirmed with a full field investigation of the primary marketing area.
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PROJECT PRICE POINTS
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RMC’s final step in the analysis process is to provide baseline guidance as to the rate sensitivity a
new construction program would be expected to support based upon current market
conditions.
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The site-based analysis shows support for:
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56. Rental Age-Restricted Program. The Age-Restricted Multifamily Analysis found a total of 635
units of housing development are supported in the assumed primary marketing area (the
Inner Market Area). This computation was based upon the Disposable Household Income
reporting range of $25,000 to $50,000 per annum only and would reflect pricing in the range
of $1,000 to $2,000 per month for housing units in this asset class, suggesting a daily rate
(temporary housing rate) range of $33/day to $66/day.
57. Rental ILF Program. The ILF Demand Analysis found a total of 159 living units of ILF rental
housing are supported in the primary marketing area. This computation was based upon
the assumption the qualifying household income would be equal to a disposable household
income of at least $50,000 (Current Year). This would suggest that as much as $35,000
would be made available for housing, meals and local transportation – a sum of
approximately $3,000 per month for rental ILF housing residency being available.
Accordingly, if the median rate is $100/PPD (or less) at the new facility, then the property
would be assumed to be correctly positioned to the market (subject to field confirmation).
58. Entry-Fee ILF Program. The Entry-Fee Demand Analysis found a new construction demand
for a total of 204 living units of ILF entry-fee housing in the primary marketing area (Inner
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
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Market Area). This computation was based upon the assumption that seniors having a
current net worth of at least $250,000. The Median Net Worth for the market area was
estimated at $146,505 for Households Aged 65-74 and $158,696 for Households Aged 75+.
This suggests the pool of qualified households is equal to half of the total 22,307 households
for these age groupings and that the minimum entry-fee price point would be equal to 60%
of the Median Household Net Worth – or; a minimum of $131,049 (subject to field
confirmation).
59. Rental ALCF Program. The ALCF Demand Analysis found a total new construction demand of
83 living units of rental ALCF housing in the primary marketing area. This computation
assumed that only income-qualified Age 75+ households would be theoretically included in
the pool and that qualifying income was a disposable household income of $50,000 for the
Current Year. Historically, seniors have been willing to spend up to 80% of their disposable
household income on housing, care, food, local transportation and related expense. This
would suggest a median rate that would not exceed $40,000 per annum – some $3,333 per
month ($111/PPD – subject to field confirmation).
60. Rental ALZ/ALCF Program. The Dementia Demand Analysis found a total new construction
demand for 48 living units of rental ALZ/ALCF housing in the primary marketing area. This
computation assumed that only income-qualified Age 75+ households would be
theoretically included in the poll and that qualifying income was a disposable household
income of $75,000 for the Current Year. Historically, almost all of the senior’s income is
made available to offset end-stage dementia care, housing, food, lifestyle management,
transportation and structured supervision around-the-clock. This would suggest a median
facility program price of $5,300 per month ($177/PPD) in demonstrated market support for
dementia care at the assisted living level (subject to field confirmation).
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CONCLUSIONS OF THE SITE-BASED SENIOR HOUSING NEW CONSTRUCTION
DEMAND ANALYSIS
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he analysis finds the demand for new senior housing facility living unit construction to
be:
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61.
For rental age-restricted multifamily housing, a total of 637 units for the most
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likely year of market entry for the proposed project (15% of Net Demand for Forecast
Year 2012 adjusted for 95% occupancy). The size of the resulting rental age-restricted
multifamily community will be limited by the number of living units that can be developed,
constructed and operated to the point of self-sustaining profitability within two (2) years as
being the most practical underwriting limit imposed by institutional investment entities.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
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Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 23: Bar Chart of Distribution of New Construction Net Demand by Class of Senior
Housing
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62. For rental ILF programs, a total of 184 units for the most likely year of market entry for the
proposed project (10% of the Net Demand for Forecast Year 2012 adjusted for 95%
occupancy). The size of a rental ILF housing program is governed by the number of living
units that can be developed, constructed and operated to the point of self-sustaining
profitability within three (3) years, as being the practical underwriting limit when markets
show very high levels of entrenched demand potential.
63. For entry-fee ILF programs, a total of 237 units for the most likely year of market entry for
the proposed project (10% of the Net Demand for Forecast Year 2012 adjusted for 95%
occupancy). Institutional investors require no less than 75% pre-sales before the
construction funding will close. This sets a practical limit that is governed by the sales
penetration rate that will allow continued marketing of the property – including the
replacement of presales rescissions.
64. For rental ALCF programs, a total of 96 units/beds for the most likely year of market entry
for the proposed project (10% of the Net Demand for Forecast Year 2012 adjusted for 95%
occupancy). As is the case with the rental ILF housing product, the ALCF development
program is limited to what can be developed, constructed and stabilized within three (3)
years of the date of the closing of the construction loan.
65. For rental ALZ/ALCF programs, a total of 51 units/beds for the most likely year of market
entry for the proposed project (10% of the Net Demand for Forecast Year 2012, adjusted for
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
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an assumed 95% operating capacity). As is the case of the ILF and ALCF programs, the
size/bed count of the ALZ/ALCF development program is limited to that program that can be
developed, constructed and be operationally self-sustaining within three (3) years.
All additional analyses and conclusions are beyond the scope of this Report.
END OF REPORT
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
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Burlington, Texas Sub-Market Senior Housing Industry Report
ABOUT RAINMAKER MARKETING CORPORATION
R
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ainmaker Marketing Corporation, Inc. has provided capital finance, operations,
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development, construction and site selection related consulting services throughout
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North America since becoming formally incorporated in 1993. Prior to 1993 Rainmaker
Marketing Corporation, Inc. was operated as a sole proprietorship by Clinton E. Lovell. Senior
housing related development and finance consulting assignments make up the vast majority of
consulting assignments Rainmaker Marketing Corporation, Inc. accepts on an ongoing basis,
with hundreds upon hundreds of project consulting assignments completed for publicly-traded
senior housing companies, privately-held senior housing companies and not-for-profit senior
housing companies for programs ranging from single-project development programs to regional
and national roll-outs of multiple properties across all major markets inside and outside the
United States.
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Rainmaker Marketing Corporation provides the following related services for senior housing
development programs:
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Market Feasibility Studies. Full-scope market feasibility studies include demographic
analyses, competitive compendium analyses of directly competitive and indirectly
competitive facilities, net demand analyses, staffing patterns analyses, price pointing,
unit mix, unit sizing, services recommendations and amenities recommendations.
Financial Feasibility Studies. Complete budgeting services for operating and nonoperating cash flows covering a 5-year period that includes comprehensive cash flows
analyses for the pre-construction phase, construction phase and post-construction
phase development and operations of the resulting properties.
Capital Finance Consulting.
Complete business and capital finance planning,
documentation and support for private placement offerings, commercial real estate
syndications, private activity bond syndications, tax credit-based securities offerings,
management presentations, funding solicitation presentations and program
management services.
Development Management & Owner Representation. Complete project planning,
development team selection, program management, marketing, administrative support
and related services to move the project from conception through the completion of
construction.
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Rainmaker Marketing Corporation, Inc. maintains offices in Houston, Texas and may be found on
the World Wide Web at http://www.rainmakermarketing.com. This document is the
copyrighted intellectual property of Rainmaker Marketing Corporation, Inc. and may not be
copied or reprinted without full attribution.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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Burlington, Texas Sub-Market Senior Housing Industry Report
1
GLOSSARY OF TERMS
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ctivities of Daily Living (“ADLs”). A measurement of a person’s ability to live
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unsupervised in the community based upon the person’s ability to perform certain self4
care activities on a routine (daily) basis and include bathing, dressing and undressing,
self feeding (eating), transferring from bed to chair and back again, self-managed continence,
walking/getting outside.
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Adult Children Households. Refers to those certain households within a given marketing area
that are Households Aged 45-64. These households constitute the secondary market support
for the construction of new senior housing facilities and also represent the long-term market
pool of cohorts that can be expected to supply future residents. For the purposes of this Report,
Adult Children Households are further defined as those households aged 45 to 64 that have
disposable household incomes of at least $100,000 per annum and/or household net worth of
at least $250,000.
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Alzheimer’s Assisted Living Care Facility (“ALZ/ALCF”). An assisted living facility that provides
specialized care programming and lifestyle management for persons with a heavily-dementing
disorder or diagnosis of Alzheimer’s Disease. Most people who are diagnosed with Alzheimer’s
Disease (or a heavy-dementing disorder) can live out their lives within a senior housing property
operated under an ALCF class licensure instead of the lowest rung – skilled nursing care. This
typically represents a discounted cost because the staffing ratios are generally more favorable
for the resident in the skilled nursing care environment than the assisted living environment.
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Assisted Living Care Facility (“ALCF”). A type of senior housing program where residents
receive complete assistance with all IADL lifestyle activities and assistance with all ADL self-care
activities in addition to the provision of housing and utility service within a senior housing
setting that does not include supervised care by a physician. ALCFs are licensed in every state
and represent the second step in the senior housing chain – one step from the top (independent
living) and one step from the bottom (skilled nursing care or dementia care).
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Average. A computation where the total amount of the line item is divided by the total number
of cohorts – the arithmetic mean.
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Continuing Care Retirement Community (“CCRC”). A type of senior housing program that
offers housing and access to future care on one contiguous campus type setting. Most CCRCs
developed today offer independent living, assisted living, dementia/Alzheimer’s assisted living
and hospice care. End-stage care is provided through home health agencies so the liability and
reduced profitability presented by skilled nursing care programs is eliminated from the program
as the vast majority of residents would be expected to age in place and be able to live a fullysupported life without having to leave the campus at some later date.
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Current Year. Refers to estimates pertaining to the year ending December 31, 2010.
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Entry-Fee. Represents a concept in senior housing where the resident pays a one-time fee upon
entering the property and this fee is materially significant to the developer and/or
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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Burlington, Texas Sub-Market Senior Housing Industry Report
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owner/operator of the community as these fees are materially significant. Entry fee senior
housing communities started with life care contracting back in the late 1970’s with the advent of
the “heavy care” model of senior housing that focused on the “mini-hospital” concept of care
planning. Today, entry fee properties include those with and without life care contracts and
some communities don’t even offer skilled nursing care due to the penetration of home health
aide services in the market that has generated significant savings for the Medicare and Medicaid
health care insurance systems.
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Gross Demand. A measurement of the demand for senior housing living unit accommodations
within a defined geographical area based upon an assumed amount of the area’s senior
population that would be theoretically qualified to be a full-time resident based upon the
portion of the grouping that has sufficient household income to offset the costs of residency,
would be of an advanced age that would make them statistically likely to require the housing
based upon a measurement of lifestyle management disability rates (in the cases of
independent living programs) or a measurement of self-care limitations (in the cases of assisted
living programs) or a measurement of the incidence of a dementing disorder that would result in
a need for a structured living environment (in the cases of Alzheimer’s assisted living units); but
prior to the point where changes in the theoretical supply of housing by current, planned and/or
proposed competition in the senior housing market are netted out of the Gross Demand
computation. Gross Demand also includes adjustments to the demand pool owing to the impact
of in-migration attributable to so-called “Adult Children Households” – households aged 45-64
with disposable incomes of at least $100,000 per annum – that move senior family members to
senior housing facilities located within the market area.
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Households. All residents living in a given area are demised into households which are either
“Family Households” or “Non-Family Households”. Family Households are households of more
than one (1) person where the occupants are related by blood or marriage. Non-Family
Households are households of one (1) or more persons who are not related by blood or
marriage.
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Independent Living Facilities (“ILFs”). A class of senior housing licensure where there is the
provision of an apartment that is age-restricted and includes routine maintenance, meal service,
utilities, weekly housekeeping, flat linen service, scheduled transportation and
organized/structured activity programming as part of the ongoing lease payment for renting the
apartment.
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Instrumental Activities of Daily Living (“IADLs”). A measurement of a person’s ability to
manage the conditions of their lifestyle as measured by a series of activities that include light
housework, meal preparation, medication management, personal shopping, telephone usage
and fiscal management.
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Median. In a number set, the median number represents that number which separates the top
50% from the bottom 50% of reported values.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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Net Buildable Demand. The number of living units of senior housing construction a given
market would be expected to fill over an assumed 12 to 18 month marketing exposure and is
net of all offsets due to competing property gains/losses. Net Buildable Demand is that level of
Net Demand that can be realistically assumed to be captured by a well-capitalized and
professionally-managed senior housing marketing program effort and corresponds to the
expected sales contract closing rate for all tours offered by/at the property. Typically, this rate
does not exceed 15% of the Net Demand pool. The ideal set of outcome circumstances
measured would reflect a single-digit penetration rate of Net Demand pool in order to fill the
facility to 100% occupancy within a 12 to 18 month window. The realistic Net Buildable Demand
is predicated upon the assumption the proposed property development program would not
require more than 36 months to develop, capitalize, construct, market and operate to the point
of achieving self-sustainable operations as any property theoretically requiring more than 36
months of construction phase and initial lease-up operations would not qualify for underwriting
in most commercial bank lending programs and government-insured lending programs such as
the FHA/HUD Section 221, 222, 223 and 232 loan-insurance programs.
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Net Demand. A measurement of the demand for construction of new senior housing living units
after the reductions for changes in the supple of competing senior housing operations are
netted out of the Gross Demand pool. It is this theoretical pool that will serve as the basis for
new construction at a fractional rate that corresponds to average market expectations for walkin sales closings at the average senior housing facility in operation today that is assumed to be
competently managed and capitalized.
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Penetration Rate. Refers to the percentage of qualified Net Demand in a given marketing area,
for a specific class of senior housing in order to fill the facility to a theoretical 100% operating
capacity. In construction finance underwriting, the benchmark penetration rate is 15.00% in
most cases, with underwriters having a preference for those projects that require a penetration
rate of less than 10.00% of the primary marketing area.
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Per Patient Day (“PPD”). There are 365 patient days in each bed/unit year and this is used to
create a relational comparison of costs and revenues for senior housing facilities.
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Primary Marketing Area or Geographical Primary Marketing Area (“PMA”). With respect to
the commercial income-producing property development industry, the term refers to that
geographical area surrounding a given location wherein a specific type-class of incomeproducing property (e.g.: multifamily, senior housing, retail, etc.) would be expected to garner
at least 75% of its total ongoing sales revenues.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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APPENDIX SECTION
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his section contains repetitive data sheets pertaining to the analysis that were not
presented in the body of the report for the purposes of quick reference.
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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Exhibit 24: Chart Presentation of Expected Maximum Sustainable FHA/HUD Mortgage Per
Living Unit by Program Type
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
53
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 25: Syndication Costs Analysis Spreadsheet – Fractional Real Estate Financing Plan
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
54
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 26: Distribution of Total Population by Reporting Year by Age Spreadsheet; Outer
Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
55
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 27: Distribution of Total Population by Reporting Year by Age Spreadsheet; Middle
Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 28: Distribution of Family Households by Reporting Year by Income Bracket
Spreadsheet; Outer Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
57
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 29: Distribution of Family Households by Reporting Year by Income Bracket
Spreadsheet; Middle Market Area
Exhibit 30: Distribution of Households by Age by Income Bracket (Current Year) Spreadsheet;
Outer Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
58
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 31: Distribution of Households by Age by Income Bracket (Current Year) Spreadsheet;
Middle Market Area
Exhibit 32: Distribution of Households by Age by Income Bracket (5-Year) Spreadsheet; Outer
Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
59
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 33: Distribution of Households by Age by Income Bracket (5-Year) Spreadsheet; Middle
Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
60
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 34: Household Net Worth (Current Year) Distribution Spreadsheet; Outer Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
61
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 35: Household Net Worth (Current Year) Distribution Spreadsheet; Middle Market
Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
62
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 36: Current Year Distribution of Households by Disposable Income Bracket By Age
Group Spreadsheet; Outer Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
63
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 37: Current Year Distribution of Households by Disposable Income Bracket By Age
Group Spreadsheet; Middle Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
64
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 38: Housing By Occupant Type & Housing Unit Value Class Spreadsheet: Outer Market
Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
65
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 39: Housing By Occupant Type & Housing Unit Value Class Spreadsheet: Middle Market
Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
66
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 40: Rental Age-Restricted Multifamily Demand Spreadsheet; Outer Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
67
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 41: Rental Age-Restricted Multifamily Demand Spreadsheet; Middle Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
68
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 42: Rental ILF Demand Analysis Spreadsheet; Outer Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
69
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 43: Rental ILF Demand Analysis Spreadsheet; Middle Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
70
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 44: Entry-Fee ILF Demand Analysis Spreadsheet; Outer Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
71
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 45: Entry-Fee ILF Demand Analysis Spreadsheet; Middle Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
72
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 46: Rental ALCF Demand Analysis Spreadsheet; Outer Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
73
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 47: Rental ALCF Demand Analysis Spreadsheet; Middle Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
74
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 48: Rental ALZ/ALCF Demand Analysis Spreadsheet; Outer Market Area
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
75
October 2010
Burlington, Texas Sub-Market Senior Housing Industry Report
Exhibit 49: Rental ALZ/ALCF Demand Analysis Spreadsheet; Middle Market Area
End of Document
Copyright 2010, Rainmaker Marketing Corporation, Inc. All rights reserved.
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