As Americans in Southern California keep aging, the current senior care center inventory will not be enough to support the increasing number of elderly individuals. This is particularly true for centers that deal with memory care — for example, those that accommodate patients with Alzheimer’s disease and dementia. At the same time, the shrinking availability of land and commercial leases in dense parts of Southern California, such as Los Angeles, has pushed memory care-related development into the region’s secondary markets.
Secondary markets for memory care development include the likes of San Diego County, the San Fernando Valley and Riverside County. Those wishing to develop land for memory care facilities face stiff competition from single-family and multifamily developers. After all, the latter have a far better land stake since they can cover the cost of land with their handy compressed cap rates.
In addition to looking at secondary markets, developers of memory care facilities have become more creative when it comes to building and financing their spaces. For instance, long-term leases for land have become more commonplace across Southern California for all classes of assets. These types of leases were once unpopular for developers and banks to use for underwriting purposes.
Los Angeles remains an in-demand area for those looking for commercial leases or property to develop for their businesses. However, this also means that competition there is tough. Fortunately, an attorney can offer the legal guidance that aspiring business tenants, property investors or property developers need to achieve their unique goals in the booming Southern California real estate market.
Source: bisnow.com, “High Land Prices An Obstacle For SoCal Memory Care Developers“, Parker Brown, May 29, 2018