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Marathon Development, Inc.
 

FAQ


We don’t know where to start.  We are interested in developing senior housing. What would you charge to meet with us?

A high percentage of Marathon’s clients are board governed organizations.  Consequently Board of Directors typically have many questions from many different points of view.  Marathon will provide two site or meeting visits pro bono to discuss the development process, financing options, answer questions, discuss Marathon’s potential scope of services and cost as well as layout the projects next steps with only the reimbursement of travel costs, if any.


How much does a market study cost?  What will it tell me?

A market study is the foundational document needed at the inception of the project vision or idea.  The market study will cost from $3,000 - $7,500 and will take 4-6 weeks to complete.  The market study will be prepared by an independent third party provider of market studies, not Marathon.  Marathon will assist in the selection of the market study analyst, if requested by the client.  The market study report, when complete, will outline the current supply and demand, if any, for the particular senior housing segment being analyzed.  The report will also identify potential projects in the pipeline, current area occupancies, rates, unit and payer mix.  The market study conclusion will list the potential number of units the market can absorb at what rate over what period of time.


How does Marathon structure the development fee?

Marathon works with each client to establish a scope of services that best meets the client’s mission, vision or goals.  Typically Marathon’s development fee is structured in two parts:

  • The “feasibility period fee; and
  • If the project moves forward, the “development fee” which incorporates the entire design, permitting, construction and close out of the completed project.

The feasibility period fee ranges from $10,000 - $20,000 depending on scope of services. The development fee if the project were to move forward would be 5 -6% of the total project cost, minus land, construction period interest and project leased up costs.  Any fees paid Marathon during the feasibility period are credited toward the overall development fee.  Marathon’s development fee will not increase the project costs but be paid with overall project saving derived from Marathon’s professional project management through design/value engineering, project schedule and financing options.


Does Marathon offer on-going management of the completed development?

Marathon does not do third party management but can assist in the selection of the long term manager and has frequently done so for many clients.  Because of our experience we can provide seasoned guidance in finding the appropriate facility operator.


Does Marathon have any experience working with not-for-profit organizations?

The majority of Marathon’s development work has been with Board governed not for profit organizations which include faith based 501c3 and private not for profit 501c3, Housing Authorities, Health Districts, Hospital Districts, Senior Centers as well as several for profit organizations including Emeritus, Life Care Services, Senior Services of America and Village Concepts.

We clearly understand Board governance and appreciate the time and decision processes involved.  Owner references as well as, lenders, general contractors, architects, civil engineers, and management companies are plentiful and are available as needed.


What is turn-key development?

Marathon Development Inc. specializes in the development, refurbishment, renovation and expansions  of senior living communities.  Marathon is a development and consulting firm which provides third party development services to Owners which include:

  • Project feasibility studies
  • Assists in creating the project vision
  • Creates the project pro forma’s and project estimates
  • Identifies pre-construction, construction and permanent funding
  • Procurement of all third party professionals including the geo technical, phase I, traffic, architect, structural engineer, civil engineer, landscape architect, general contractor, interior designer and other necessary project team members
  • Marathon facilitates and provides project team coordination, design oversight, permit coordination, project schedule and state licensing assistance.
  • During the construction phase Marathon provides active project oversight with site inspection making sure that the project design and specification are met by the general contractor
  • Construction draw compilation and overall project budget accounting are typically within Marathon’s scope
  • At project close out Marathon’s scope includes managing punch list items, monitor commissioning of new systems and equipment, coordination and completion of the as-built documents and delivery of the Owners Equipment Manuals. 

In short, Marathon provides “turn-key” development services that facilitate the development of the project from the vision to occupancy of the completed project.  Marathon earns a development fee that is a lender allowed project cost.  The development fee is financed and disbursed from the loan in the same manner as the architect or general contractor would be paid.  Lenders generally prefer to have a skilled developer involved in the process as it makes the entire development experience better as project schedule; budget and overall project coordination are managed professionally.


How long does a project take from the vision to completion?

Senior housing projects can take time.  Typically a project will take from 3.5 -5 years to complete the feasibility, design, permitting, construction and lease up stabilization.  The project timeline although approximate and varying by jurisdiction and site difficulty looks like the following:

Project Feasibility period i.e., market study, pre application meeting with jurisdiction, financial modeling of the project pro forma, and project estimate.  Site studies, conceptual site and utility plans.  Public and stakeholder meetings - 6 months.

Project design and permitting – 9-12 months

Project construction – 12-18 months

Occupancy – stabilization to 93% - 18-24 months


How much does it cost to develop a senior community?

The per unit cost varies by location and funding source.  Typically we see project expenses which include ALL COSTS of:

  • Land cost
  • All Soft costs including but not limited to design, permitting, hookup, construction interest, pre opening, lease up reserve and developer fee.  Furniture fixtures and equipment, emergency call, generator
  • All Hard costs including all vertical construction costs, site and landscaping

$150,000 - $200,000 per unit TOTAL, even includes the small kitchen wares and facility linens!


Why should we select Marathon over other companies to handle our project?

Marathon offers turn-key development services in long-term care and senior housing.  We are based in the Pacific Northwest but travel nationally.  Marathon has a strong network of professionals from all disciplines that have successfully honed their skills on projects of this type.  Our track record is full of satisfied clients and references are eagerly shared with potential clients. We strive to bring our client’s mission,vision and goals to reality.

 
 

Specializing in Senior Housing for Profit and Non-Profit Organizations
Providing Real Estate Development & Consulting Services Nationwide

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