Description

Located in Decatur, Alabama, this property benefits from a senior-heavy demographic profile, with approximately 18.1% of the city’s population aged 65 and older—slightly above the national average. Within the broader metropolitan statistical area, nearly one in five residents is a senior, creating a deep and concentrated target market for assisted living services. As the second-largest city in the Huntsville–Decatur Combined Statistical Area, which has a population exceeding 880,000, Decatur serves as a key regional hub for surrounding rural communities, including Lawrence and Limestone counties. The area also offers economic stability, with a median household income of approximately $63,987 and a cost of living about 12% below the national average, supporting stronger discretionary income levels for private-pay senior care. The market fundamentals are compelling, with an average net worth of $1,696,281 and average household income of $70,747 among residents aged 75 and older, along with an average home value of $361,052. There is an estimated unmet demand of 196 assisted living beds within a 10-mile radius, underscoring growth potential. The property is offered at $3,800,000 and currently generates $2,174,408 in gross revenue, with November occupancy at 70.5%. Based on normalizing expenses to 75% of gross revenue, the forecasted NOI is $543,602. Comparable Southeast sales average $233 per square foot, while the 2024 Weitz replacement cost (construction only) is estimated at $273 per square foot. From a financial standpoint, the property qualifies for SBA 504 financing with a 25-year term, 85% loan-to-cost, and a 5.856% interest rate. Projections assume vacancy of 29.5% in Year 1, 19% in Year 2, and stabilization at 10% from Years 3 through 10, with revenue growth estimated at 5% annually. Under this model, the investment yields a projected IRR of 83.11%, cash-on-cash return of 33.16%, an acquisition cap rate of 12.3%, and a debt service coverage ratio of 1.9. The estimated exit value in Year 5 is $9.5 million, with projected net sales proceeds of $6.3 million after expenses.