A market study is defined as:

Market Study - A macroeconomic analysis that examines the general market conditions of supply, demand and pricing or the demographics of demand for a specific area or property type. A market study may also include analysis of construction and absorption trends.

Generally, market studies are engaged to determine if there is adequate market demand to develop a specific property type in a defined market area. While a market study generally includes a conclusion relating to supply and demand and the probability of a market area's ability to absorb additional construction, market studies do not include property specific projections of income, nor do they address the financial feasibility of a proposed project. To determine these factors, a feasibility analysis is required.

Feasibility Analysis - An analysis undertaken to investigate whether a project will fulfill the objectives of the investor. The probability of a specific real estate project is analyzed in terms of the criteria of a specific market or investor.

A well-prepared feasibility analysis includes all the elements in a market study, and additionally will provide projections of: total project cost; achievable income; probable operating expenses; and the resulting rate of return to the investor or developer. This rate of returned is examined in relation to market criteria to determine if it is sufficient to justify the requirements of the specific market or investor.

IRR's Seniors Housing & Health Care Specialty Practice assisted numerous developers and lending institutions analyze markets and feasibility. Our seniors housing experience ranges from stand alone nursing facilities, to large continuing care campuses. In the health care arena, we have conducted studies for medical office buildings, surgery centers, and many other property types.

We have completed market studies and feasibility analyses for developers, conventional lenders and for HUD lenders and sponsors. We can also assist developers in selecting sites, evaluating project design, and developing pro forma income and expense statements.