Leverage Your Experience & Balance Sheet to Facilitate New Growth

January 21, 2025

Unique Development Structure:

Securing the ideal location is only the beginning.

The real challenge lies in structuring the capital to bring your vision to life. Developing a senior living community is a complex undertaking that requires meticulous planning and strategic execution. From analyzing traffic patterns to identifying age and income-qualified residents, every detail must align to ensure success.

Are there gaps in the competitive landscape that your project will fill? Can the net operating income (NOI) support the development costs? These initial considerations serve as a litmus test for feasibility.

Our unique approach to project delivery integrates build-to-suit development, financing and lease-back structuring, and the ability to maintain project control. This comprehensive strategy is designed to turn your senior living development from concept to reality with confidence.

Market Analytics: The Foundation for Success

Understanding the demand for senior living in your market is critical—but it’s only part of the equation. To position your development for success, you must also analyze:

  • The competitive landscape.
  • Market rents, absorption, and occupancy rates.
  • The remaining net demand in the market after factoring in the competition.

These insights are key to identifying opportunities and crafting a project that meets both market needs and operational goals.

Build-to-Suit Development: A Tailored Approach

A build-to-suit development approach starts with designing the senior living community around your unique operational objectives, staffing requirements, and programming goals. This end-to-end solution encompasses:

  • Site Selection: Finding the perfect location to support your vision.
  • Procurement: Ensuring all resources align with project needs.
  • Zoning and Entitlement: Navigating regulatory requirements.
  • Architecture and Engineering: Seamless integration of services.
  • Construction Delivery: Managing the development process with a construction completion guarantee.

By overseeing the entire scope, this approach ensures seamless execution and aligns every phase of the project with your goals.

Finance Lease-Back Structuring: Flexibility & Control

This financing model is structured as a Lease-Back, where the operator (tenant) signs a long-term lease in exchange for the landlord financing all the project development costs. Unlike traditional Lease-Back structures, this unique arrangement includes:

  • Purchase Options: Operators can buy back the property at pre-determined intervals at decreasing price points creating an equity position and granting the operator long-term control over the community.
  • Competitive Lease Rates: Designed for operators with a proven track record and strong financial statements.
  • Limited Financial Risk: The operator’s financial guarantee is limited to the lease payments and operating deficits.
  • Minimal Upfront Cash Investment: The operator’s up-front cash investment is limited to the pre-opening expenses.

With the developer overseeing the project design and construction, and capital partners covering the required cash investment for the project development costs, this structure empowers operators to focus on operational excellence while retaining flexibility and control.

 

Partner with ERDMAN for Success

Whether you’re a seasoned senior living operator looking to expand or a newcomer navigating your first development, ERDMAN is your trusted partner at every step. Our team of skilled developers, architects, interior designers, and engineering professionals brings unmatched expertise to guide your project from concept to completion.

With a deep understanding of the senior living industry and the nuances of successful project delivery, we’re here to help turn your vision into reality.

Take the Next Step

Contact ERDMAN to discuss how we can help you leverage your experience and balance sheet to facilitate new growth.