How is memory care financed and what construction features matter?

Memory care construction features and financing implications

Construction features: memory care units sit within secure neighborhoods (typically 12-24 units per neighborhood) with controlled-egress doors, secure outdoor courtyards or gardens for safe wandering, sensory-design features (color contrast in flooring, photographs of resident memories at room entries, daylight access). Bathrooms are designed for staff-assisted use.

Cost per unit: typical memory care construction runs $250-$400K per unit (vs. $200-$300K for AL and $150-$250K for IL) reflecting the smaller unit count, higher staffing space, and specialized features. Sponsors should budget for the cost differential at acquisition or new construction.

Staffing ratios: memory care typically operates at 4:1 to 6:1 resident-to-staff during day shifts (vs. 8:1 to 12:1 for AL). The higher staffing ratio is built into the operating model and rents.

Financing implications: memory care typically finances at AL terms with conservative DSCR (1.30x-1.40x) reflecting the operating-business intensity and rent sensitivity. HUD 232 LEAN finances memory care under the AL category. Lender bench overlaps significantly with AL.

Sponsor playbook: confirm operator's memory care experience explicitly, generic AL operators don't always run memory care well. Confirm construction features meet operator's care-model requirements. Engage MC-experienced architect early in design phase.