SBA 504 Assisted Living Feasibility Study in Arizona

Arizona's 504 assisted living book

Assisted living without nursing care is 6 of 39 among Arizona's classes under 504, and the state ranks 5 among states by count. The 29 loans total $26.8 million, with a midpoint of $730,000, 0.90x the nation's 504 assisted-living figure, with the quartiles at $280,000 and $1.3 million. Franchised loans are 3.4%. Maricopa County holds 21 loans, Pima 6, and Pinal and Yavapai 1 each.

Two development companies

Arizona Capital Source: 14 loans, $9.4 million. Then The Mortgage Capital Development Corporation: 11 loans, $12.3 million, which means fewer but larger tickets. SBA lists the current holders. FY2026 stands out with 9 loans and $11.0 million, against none in FY2018, shown as $0, and 1 loan in FY2023. Interest in the class has risen in the last two fiscal years.

What the code can see

The industry code singles out homes that employ no on-site nurses; memory care is not coded anywhere, and a home that does employ nurses is filed with skilled nursing or continuing care. A project that mixes acuity levels therefore belongs partly on those sibling pages. For Arizona's 504 homes two rates, approvals cancelled and loans charged off, are left out, the cohorts having fallen below SBA's minimum, so a lender gets no outcome floor from this page.

What an Arizona study has to test

The study should show the supply of senior housing in the target submarket, the occupancy of nearby homes, and the number of older residents with means to pay privately, since assisted living is largely private-pay. Licensed bed count and the care levels offered determine staffing, and staffing is the largest cost, so show ratios, wages and turnover. A 504 loan funds the building: give the purchase or construction cost, the code requirements for a residential care occupancy, and the equity. Lease-up is the central risk, and the study should show months to stabilised occupancy and the cash needed to carry the home meanwhile. Arizona's summer heat and retiree inflow affect timing, and resident turnover should be explicit. The appraisal must say what the property brings if the operator leaves.