A tight labor market has continued to drive up construction costs for skilled nursing facilities — and that’s before accounting for the potential effects of disruptive new tariffs from the Trump administration.
The cost to build a “high-level” SNF rose from $317 per square foot last winter to $326 this summer, according to the most recent update from architecture and engineering firm The Weitz Company. Those numbers represent the most aggressive estimations from the Des Moines, Iowa-based firm: On the lower end for high-level construction — which Weitz defines as properties made from steel or concrete with luxury finishes — skilled nursing costs rose from $247 per square foot to $255.
For so-called “mid-level” projects, which involve wood-framed construction and “standard” finishes geared toward middle-income residents, the range rose from $197 to $231 per square foot last winter to $202 to $236 this summer.
“The labor shortage continues to be an issue in most markets, with an aging workforce and fewer young people joining the trades,” Weitz noted in its analysis. “This trend is not likely to subside anytime soon.”
The firm also factored in price increases for certain key construction materials, including oil-based supplies, lumber, and PVC. But because those costs come from completed projects and not communities currently in development, the most recent figures pointedly do not reflect potential spikes due to the federal government’s new tariffs on goods from countries such as China and Mexico.
“Thus, we suggest additional dollars to cover tariff risk in the 2% to 4% range,” Weitz concluded in its analysis. “If you are building in a busy market, then adjust the costs 5% to 10% to accommodate for tight labor.”
Skilled nursing costs continue to rank among the most expensive types of senior living projects, surpassed only by independent living commons developments in Weitz’s rankings. For comparison, an assisted living facility runs $237 to $280 per square foot on the high level, and $176 to $228 per square foot for mid-range construction.
Construction costs also vary significantly by market: Weitz’s numbers are based on cities with a cost index of 100: The relatively cheaper city of Nashville, Tenn. has an index of 85.8, while the more expensive Chicago market has an index of 120.5.
Written by Alex Spanko
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