As new development projects remain tough to notch, senior living companies are wielding data to make more granular decisions about how and where they grow.
For a recent joint-venture project in Rehoboth Beach, Delaware, partners Ciel Senior Living and Redico and its vertically integrated operator American House Senior Living looked at more than just demographics.
The income profiles of prospective residents are just one of the factors they used to target the Northeastern U.S. market. Not only did the partners choose the market because of its lower real estate taxes, but also they learned retailers including Costco, Dick’s Sporting Goods and Whole Foods were due to open locations in the market soon. Following those retailers’ leads made the bet more reliable, said Ciel Co-Founder Edward Burnett, as it meant those markets would have consumers in the companies’ target demographic.
Senior living operators and their partners have long conducted market studies to gauge the viability of a market. Now, with the use of technology and data, they can eke out projects in even narrower, more niche markets for growth than they would without it.
Hunting for locations
Average income, staffing, the prospect of future rent growth – these are components of senior living market selection for operators like Momentum Senior Living.How those factors trend can help an operator determine whether a market is viable for occupancy growth or contains hidden hazards.
Laguna Niguel, California-based Momentum Senior Living, which operates six communities, scouts out locations for its ownership group, according to CEO Josh Johnson. The latest addition to the operator’s portfolio is The Marisol of Huntington Beach, a luxury community currently under construction in Huntington Beach, California.
Land values and construction costs combine to make building tough to accomplish in the state of California, according to Johnson. But by digging into the amount of area competition, area income and demographic projections, Momentum found a suitable location in Huntington Beach for a new community.
Momentum examined competition and the income of residents to land on the Huntington site.
The desirable but-expensive-locale had a barrier to entry and thus lacked other new communities. That made the site a challenge worth pursuing.
Momentum’s journey in California was evidence that prospects are attracted to new communities in markets that have lacked new construction in the last decade.
“It really provides an opportunity for developers who are willing to take the risk of a high construction cost of building a class A building, because we are seeing a real flight to quality overall,” Johnson said.
The company operates units spanning 1,400 square feet – to meet boomers’ desire for “bigger is better,” Johnson said – along with walk-in closets and in-unit washers and dryers in every unit, including in assisted living and memory care.
Living in Orange County, California is expensive and the community raised wages for employees by 10% in 2025 to stay competitive.
“We need to be able to pay a good wage for them and be competitive,” he said.
DMK Development currently has two projects underway in markets where it hasn’t seen much new growth from competitors: A 185-unit independent living, assisted living and memory care community in Sheboygan, Wisconsin; and a 115-unit independent living, assisted living and memory care community in Winder, Georgia.
“They get the very strong rates in the market, and occupancy levels are really, really high,” Kitchen told SHN. “A lot of times there’s a waitlist for these communities. We’re running into more and more of those kinds of situations in more and more markets.”
Ciel Senior Living and Redico examined the seasonal nature of staffing in Rehoboth Beach, a beach town; and they tracked the number of sites that competitors could buy and convert into a senior housing community. The number of retailers and real estate developers building grocery stores, retail options and high-quality single family homes all indicated the market has viable for senior living development.
Scouting the competition and rents
Senior living markets carry potential that isn’t always apparent from a 30,000 foot view.
San Diego, for example, is located in California, where new development is generally tough to notch. But the market carries a strong household base with annual incomes ranging from $50,000 to $75,000 and an 11.2% penetration rate, stabilized average and median occupancies at 89% and 92% respectively and below-average construction-to-inventory ratio, which indicates little competition in the near future, according to NIC MAP data.
“Labor market data is increasingly important and it’s a key underwriting component. Even markets with strong demand fundamentals can be difficult to operate in if workforce availability or wage pressure becomes a constraint,” NIC MAP Senior Housing Market Specialist Dustin Shandri told SHN.
When DMK looks for locations it looks at demographic trends and population makeup for a market. An ideal range for older adults aged 70 and up is above 2% of the area’s population, according to Kitchen, and when it reaches upwards of 3%, it’s a strong indicator of what existing senior living supply could be.
“Every time we’ve seen that above 2% we’ve had good success in those markets,” Kitchen said.
San Diego’s rent growth is a considerable factor for determining demand, according to Shandri. While rent is going to vary by product type, sustained annual increases above 3% generally indicate healthy demand, according to Shandri. Rent that growth reaches 4% and above, it indicates supply has become constrained.
“Strong rent growth in combination with high occupancy and limited new supply is a powerful signal that a market needs more inventory,” Shandri told SHN. “From a developer and investor standpoint, sustained rent growth reflects a supply-demand imbalance where existing inventory is not keeping pace with qualified demand.”
As a starting point, Momentum is setting rates at The Marisol at Huntington Beach similar to The Variel, Momentum’s community in the nearby Woodlands Hills, at an average in the $9,000 per month range. The surrounding population can afford the rate and it maintains the community’s margins.
Johnson noted he scouted the surrounding area to help determine the amenities The Marisol could have in order to stand out as well.
“I always look at the level of competition around, and when I go into an area, I want to make sure that I evaluate not just their room size and their occupancy, but also their amenities and their service level,” Johnson said. “In Woodland Hills, when we went in, we identified our three main competitors. Even to this day I can tell you every amenity that each one of them has.”