Assisted Living Facility Power Play 2025: Definitive Guide to Demand, Costs, Rent-Up, Rates & EBITDA (By State)
- Donald Safranek
- Nov 13
- 8 min read
Executive Snapshot: 2025 Demand & Supply Signals
Occupancy & Supply: Senior housing occupancy in the 31 NIC MAP primary markets climbed to 88.1% in Q2 2025, while annual inventory growth fell below 1% (0.97%), the lowest since tracking began—clear evidence of tight supply and strong absorption. National Investment Center
Costs & Pricing: The national median assisted living monthly rate reached $5,900 in 2024, up ~10% YoY, according to Genworth/CareScout’s Cost of Care Survey. Memory care medians nationally commonly sit higher; recent trackers show national memory care medians in the $6,100–$7,300/month range. Carescout
Construction: Benchmark studies show seniors housing hard costs in the mid-$200s to high-$300s per square foot depending on level and finish, with assisted living “mid-level” commonly $274–$349/sf in 2024; site/land and soft costs push total development costs above $300k per unit on average. Senior Housing News
Why the squeeze? Baby-boomer aging (80+ cohort) is accelerating while new starts remain muted. NIC notes record-low construction starts through 2024–2025; multiple sources expect demand to outstrip new supply for the next several years. National Investment Center, MarketWatch
Development & Construction
Hard Costs, Soft Costs, FF&E, and Land per Bed
Hard Costs: Seniors housing projects reported $173–$262/sf for hard costs in CBRE’s development survey (2022 baseline), with subsequent industry updates indicating mid-$200s to high-$300s/sf in 2024 depending on level and finish. CBRE
Soft Costs: Averaged ~18.5% of total development costs in CBRE’s dataset—covering design, financing, entitlements, and carrying costs. CBRE
FF&E: Averaged ~3% of total development costs (~$9,700 per revenue unit). CBRE
Site/Land: CBRE’s 142-project study found site acquisition averaging ~8.2% of total (≈ $30.80/sf of GBA). For a typical 80,000 GBA Assisted Living Facility with 90 units, that approximates $2.46M site cost or ~$27k per unit (≈$27k per bed if one bed per unit). Coastal/urban infill can run 2–4× this per-bed figure. CBRE
Rule of thumb (2025): Total development budget per assisted living unit (Class B/A-): $325k–$450k in most Sun Belt/Heartland metros; $450k–$650k (or higher) in constrained coastal markets, inclusive of land, softs, and FF&E—assuming 350–450 net rentable sf/unit and modern common spaces. (Synthesis of CBRE, trade coverage, and current contractor briefs.) CBRE, Senior Housing News
Cost Benchmarks by Class (A/B/C)
Class A (urban/suburban infill): $350–$450/sf hard, premium finishes/amenities; land per bed often $60k–$150k depending on submarket constraints. Senior Housing News
Class B (suburban growth nodes): $290–$360/sf hard; land per bed $25k–$60k typical. Senior Housing News
Class C (tertiary): $250–$300/sf hard; land per bed $10k–$30k, with higher regulatory risk around staffing and reimbursement mix. CBRE
Regional Cost Differentials & Permitting Risk
Permitting and regulatory friction can materially inflate carrying costs. Example: Hawaii research shows outsized regulatory cost burden in residential development—a cautionary signal for any island/coastal entitlement path. AP News
Rent-Up & Absorption
Typical Lease-Up Timelines (to Stabilization)
Industry case studies and NIC analyses indicate stabilization windows commonly 18–30 months post-opening, with high-performers reaching targets sooner (some ~17–24 months, market- and brand-dependent). Senior Housing News
In tight-supply markets (2024–2025), faster move-ins and stronger early absorption were observed as deliveries fell; first-year momentum is a key predictor of ultimate stabilization. National Investment Center
First-Year Momentum & Marketing Levers
Pre-leasing 25–40% at CO, physician/referral pipelines, hospital discharge planners, and strong digital performance marketing can pull forward absorption.
Founders’ pricing and tiered care packages reduce friction for earlier move-ins; maintain rate integrity post-stabilization as NIC notes asking vs. initial rate gaps matter in 2025. National Investment Center
Pricing & Revenue
Base Rent: Private vs. Shared Room Rates
Assisted Living Facility national median (one-bedroom) $5,900/month (2024); private rooms trend higher, semi-private/shared lower, with wide state variance. Carescout
Operators increasingly pair base rent with care level fees (ADLs/IADLs) and ancillary services.
Memory Care Demand & Bed Rates
Memory care rents carry a premium given staffing ratios and safety design. Recent national medians cluster ~$6,100–$7,300/month, with lows near $4,000 (MS) and highs $9,000+ (MA). Eureka Health
ADLs, IADLs & Care Level Revenue Design
ADLs (Activities of Daily Living)—e.g., bathing, dressing, toileting—drive care acuity tiers and revenue; IADLs—e.g., managing meds, shopping, housekeeping—inform lower-acuity service bundles. Clear definitions support transparent pricing and documentation. Centers for Medicare & Medicaid Services
Care Revenue Model (Illustrative):
Base rent (room + hospitality)
Care level fees (tiered by ADLs/IADLs, reassessed quarterly)
One-time community/assessment fee (where allowed)
Ancillary (PT/OT partnerships, salon/spa, transportation packages, premium dining, concierge)
Ancillary Income (AL & MC)
Typical ancillary lines: salon/spa, transport, telehealth subscriptions, guest meals, pet care, premium cable/internet, and on-site therapy partnerships. Mature communities often add 2–6% of revenue from ancillaries depending on product type and state regulations (synthesis of operator reports and trade coverage). Senior Housing News
Operating Performance
OpEx Structure (Typical Mix at Stabilization)
Labor (care staff, nursing, admin): 45–55% of OpEx
Food & supplies: 8–12%
Utilities & maintenance: 6–10%
Insurance & taxes: 6–10%
Marketing/other G&A: 8–12%(Distribution varies by state wage floors, insurance markets, and building systems; operators report 2024–2025 relief vs. 2022–2023 spikes.) Senior Housing News
EBITDA Ranges & Margins
Trade benchmarking indicates mid- to high-20s% EBITDA margins at stabilized AL/AL+MC, with mixed-care campuses slightly lower given staffing intensity; independent-heavy mixes can exceed 30%. (ASHA State of Seniors Housing 2024 cited median operating margins: IL 32.5%, AL components ~29.2%, mixed campuses ~26.6%.) Senior Housing News
Underwriting guardrails (stabilized, private-pay AL):EBITDA margin: 24–32%; Management fee: 5–6% EGI; Capex reserve: $300–$400/unit-yr (Class A) rising with building complexity. (Synthesis of ASHA benchmarks + market commentary.) Senior Housing News
By-State Outlook (Top Markets)
2025–2030 Demand Hotspots (States & Cities)
Demand strength blends share of 65+ and 80+ cohorts, migration inflows, household wealth, and limited new supply. Current indicators:
Florida, Arizona, Texas, the Carolinas, Tennessee, Georgia: strong in-migration; metros like Tampa, Phoenix, Dallas-Fort Worth, Austin, Myrtle Beach, Raleigh-Durham, Nashville show rapid senior growth. Houston Chronicle
States with highest senior share include Florida, Maine, West Virginia, Vermont, Delaware, Montana (aging profile supports steady need even where population is flat). World Population Review
Many Northeast/West Coast infill submarkets show high pricing power but face entitlement and construction-cost friction, keeping pipelines constrained—supporting occupancy. National Investment Center
“Demand Score” (illustrative, combining 65+ share, migration trend, and low inventory growth):
Rank | State | Example High-Demand Metros | Why It Scores |
1 | Florida | Tampa, Orlando, Naples | High 65+ share, strong in-migration, constrained new starts |
2 | Arizona | Phoenix, Tucson | Rapid senior growth, Sun Belt migration |
3 | Texas | DFW, Austin, San Antonio | Nation-leading population growth; select senior hubs growing fast |
4 | South Carolina | Myrtle Beach, Greenville | Fastest-growing senior metro; coastal draw |
5 | North Carolina | Raleigh-Durham, Charlotte | In-migration + high HH incomes |
6 | Tennessee | Nashville, Knoxville | 65+ rising to ~20% by 2040; business-friendly |
7 | Georgia | Atlanta suburbs, Savannah | Migration + relative affordability |
8 | Nevada | Las Vegas, Reno | Retiree in-migration, tax climate |
9 | Maine | Portland, Bangor | Very high 65+ share; limited supply |
10 | Colorado | Denver exurbs, Colorado Springs | Affluent households; limited infill supply |
(Sources reflect recent occupancy/supply signals, demographic shares, and migration coverage.) Houston Chronicle, National Investment Center, World Population Review
“Land per Bed” Ranges by Region (Indicative 2025)
Region | Typical Range (AL, stabilized plan) | Notes |
Coastal urban/infill (CA, MA, WA, HI) | $80k–$150k+ / bed | Tight sites, lengthy entitlements; financing carry adds risk. CBRE+1 |
High-growth Sun Belt suburbs (FL, TX, AZ, NC, SC, TN, GA) | $25k–$60k / bed | Abundant entitled suburban parcels; premiums for corner visibility. CBRE |
Heartland & tertiary | $10k–$30k / bed | Lower land costs but smaller qualified demand radius. CBRE |
These ranges derive from site-acquisition shares in CBRE’s development study combined with current AL hard/soft cost contexts and typical GBA/unit assumptions. Always verify with recent broker land comps and municipal fees. CBRE
Underwriting Toolkit
Sensitivity Table (Illustrative)
Variable | Base Case | Low Case | High Case | Impact |
Total Dev Cost/Unit | $400,000 | $350,000 | $475,000 | Affects return on cost; leverage limits |
Average AL Rent | $5,900 | $5,400 | $6,400 | RevPAR & margin swing driver Carescout |
Lease-Up to 90% | 24 months | 30 months | 18 months | Carry, TI/marketing burn |
Care Fees/Unit (avg) | $1,200 | $900 | $1,500 | ADL intensity & staffing mix |
OpEx/Unit/Month | $3,500 | $3,800 | $3,200 | Wages, insurance, utilities |
Stabilized EBITDA Margin | 28% | 24% | 32% | Value & DSCR tolerance Senior Housing News |
Exit Cap (AL/MC) | 6.75% | 7.25% | 6.25% | Sensitivity to rate regime |
Checklist: From Site Control to CO
Land comps & DEMOGRAPHIC RADIUS (80+ growth, median income, adult children households)
Entitlement map, parking/setbacks, memory-care life-safety requirements
Schematic test-fit: unit mix (AL vs. MC), net rentable %, staffing adjacencies
Pro forma: hard/soft/FF&E, pre-opening, working capital, lease-up burn
Contracting strategy (GMP + allowances for MEP/skin escalation)
Pre-leasing & referral pipelines; hospital/physician outreach
Operating model: ADL/IADL tiers, ancillary menu, staffing ratios & training
Insurance, licensure, emergency preparedness compliance (state-specific)
FAQs
Q1. What’s the current national occupancy and why is it rising?A. NIC reports 88.1% occupancy in Q2 2025 across primary markets, with inventory growth under 1% due to years of low new starts—demand is outpacing supply. National Investment Center
Q2. What does it cost to build an Assisted Living Facility today?A. Inclusive of land, softs, and FF&E, many projects pencil $325k–$450k per unit in Sun Belt/Heartland metros, $450k–$650k+ in coastal/infill. Hard costs often $274–$349+/sf for mid-level AL (2024). Senior Housing News
Q3. How long will lease-up take?A. Plan 18–30 months to stabilization. Strong pre-leasing and first-year momentum are critical; NIC shows first-year velocity heavily influences outcomes. Senior Housing News
Q4. What are typical Assisted Living Facility room rates?A. The national median AL rate was $5,900/month (2024). Private rooms trend higher; semi-private lower. Memory care often ranges ~$6,100–$7,300+ nationally. Carescout
Q5. How do ADLs/IADLs affect revenue?A. ADLs (e.g., bathing, dressing) and IADLs (e.g., meds, shopping) define care tiers and fees. Clear documentation supports pricing and compliance. Centers for Medicare & Medicaid Services
Q6. What EBITDA margins are achievable?A. Stabilized AL/AL+MC commonly underwrite ~24–32% EBITDA margins, with IL-heavy mixes often higher. 2023 ASHA medians: IL ~32.5%, AL components ~29.2%, mixed campuses ~26.6%. Senior Housing News
Q7. Which states and cities show the greatest demand right now?A. Florida, Arizona, Texas, the Carolinas, Tennessee, Georgia lead on senior growth and in-migration; Myrtle Beach, SC is the fastest-growing senior metro, and Texas led absolute population growth in 2024. Pair this with low new starts to find the best submarkets. AP News, Houston Chronicle
Q8. What’s land per bed by state?A. There’s no one number: CBRE’s study places site acquisition ~8.2% of total development cost on average. Translating to per-bed often yields $10k–$30k in tertiary/Heartland markets, $25k–$60k in Sun Belt suburbs, and $80k–$150k+ for coastal urban infill. Validate with current local comps. CBRE
Conclusion & Next Steps
The Assisted Living Facility thesis in 2025 is straightforward: aging demand is accelerating while new supply remains historically constrained. That combination supports rents, absorption, and margins—but only for projects that buy the dirt right, control costs, design for care acuity, and win the first year of lease-up.
One external resource to track monthly: the NIC blog & NIC MAP Vision updates for occupancy, rate growth, and pipeline—crucial for timing new starts and underwriting rent growth. National Investment Center, National Investment Center
Sources referenced throughout:
NIC occupancy, rate trends & construction: Q1–Q2 2025 blogs; NIC MAP Vision market outlook. NIC MAP, National Investment Center, National Investment Center
Genworth/CareScout 2024 Cost of Care Survey (AL median rates). Carescout
CBRE seniors housing development costs (site, hard/soft/FF&E shares). CBRE
Senior Housing News and contractor briefs for current construction cost ranges. Senior Housing News
Demographic context (Census/AARP; state senior shares; migration notes). World Population Review
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