The Mandate
An institutional senior-housing developer with a regional operating partner engaged Feasibility Study Consultant to prepare a third-party feasibility study supporting a Conventional financing request for a project located in Williamson County, Tennessee. Total project capitalization fell within the $50M-$100M band. The capital provider, a national bank construction lender, required documentation consistent with current program review standards. The analytical question put to the team: Did Franklin-area 75-plus growth and household income support a 144-unit assisted living and 36-unit memory care campus.
Engagement Scope
- Primary market area defined as a 10-mile drive-time
- Comparable supply set of 13 properties
- Demand model framework: income-qualified 75-plus household capture analysis
- Financial projection horizon: 10 years
- Site inspection completed; operator interviews where applicable
- Primary data collection through field reconnaissance and third-party market data
Methodology Applied
Primary Market Area
The PMA was defined as a 10-mile drive-time from the subject site, calibrated to the demand catchment behavior typical of senior living assets in Tennessee. The boundary captured the population, employment, and competitive supply base relevant to the subject's operating thesis.
Supply and Demand Reconciliation
The comparable supply set comprised 13 properties operating within the PMA or in directly substitutable submarkets. Demand was modeled using a income-qualified 75-plus household capture analysis approach over a 10 years horizon. The reconciliation tested whether incremental supply, including the subject, could be absorbed within the projection window without compromising stabilized occupancy assumptions.
Capture Rate Calibration
The subject's capture rate was calibrated against the absorption capacity of the PMA. The analysis concluded that PMA absorption capacity exceeded subject build-out by a factor of 1.9 across the projection window, with a stabilized capture rate of 5.1%.
Exhibit 1: Comparable Supply Set, Tennessee PMA
[Table or chart rendered in delivered report.]
Exhibit 2: Demand Projection Summary, 10 years Horizon
[Table or chart rendered in delivered report.]
Exhibit 3: Subject Capture Rate vs. PMA Absorption Capacity
[Table or chart rendered in delivered report.]
Analytical Conclusions
- Williamson County income-qualified 75-plus households grew at a 6.4% trailing-three-year CAGR.
- Comparable AL/MC campuses operated at 88% to 93% stabilized occupancy with monthly rates of $6,400 to $8,900.
- Subject's projected 24-month lease-up to 90% occupancy was supported by the demand-supply spread.
- Stabilized debt yield of 9.4% cleared the lender's 8.0% program threshold.
Deliverable
The delivered report ran 172 pages with 41 exhibits distributed across nine analytical sections, plus appendices documenting comparable supply data, demographic inputs, and financial projection assumptions. The document was prepared to the documentation standards of the national bank construction lender. The corresponding Conventional review framework guided exhibit selection and supporting documentation.