For several reasons, Texas has become the most attractive state for private developers to build senior living communities. Zoning laws in Texas are more lax than in most states, making it easier—and usually less expensive—to build. The state is growing rapidly in population, claiming eight of the nation’s top 15 growing large cities in 2012, according to the Office of the Governor, Economic Development & Tourism fo the State of Texas. Caddis Partners, Thrive Senior Living, Galier, Tolso and French Design, Stroud Development, America Development, and Belmont Village Senior Living are major builders in the state, constructing more than 3,300 units based on recently revealed information.
One of the reasons for the interest in new development in the state may be the values that have been achieved recently in the acquisition market. Texas was never known as a high-priced state when it came to acquisitions, but in 2013 alone there were two sales of 100% independent living or independent living with assisted living and memory care that sold for $418,000 per unit and $387,000 per unit, respectively. In both cases, they were built in 2009 and were performing extremely well. Another community, built a year later, sold for $235,000 per unit, which is still significantly above the national market averages. In comparison, and this sale is quite different, a 30-year old community sold for just $58,000 per unit even though it had an occupancy rate above 90%. It’s always about location, and there are plenty of attractive and growing markets in Texas, which is why development keeps on going
