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01/01/1995 08:09 904893LE94 Rt7UWL1S PAGE 06 <br />?.. Age quallfied Senior households are (lien adjusted to include only <br />those iucotne qualified households based on cash flow income atone <br />' (exclusive of economic sul)portby children). MDS also considered the <br />impact of home equity in the Primary Market Area. <br />3. Senior houscholes currently residing in existing independent and <br />assisted living units are subtracted from the pool of age and income <br />qualified prospects. Competitive units arc backed out at two different <br />levels - before and after the unique income screening for the subject <br />community based upon the estimated required qualifying household <br />income for residents living at the coriumnities. <br />4. Vacant and annedlannounced independent and .assisted living <br />units are "filled" to 95% occupancy. It is presumed (hat all planned <br />competition and vacant units would achieve stabilized occupancy before <br />evaluating prospects for the prognosed community. <br />5. Annual turnover at 40% for assisted living is calculated and <br />subtracted for existing occupied living units. This factor accounts for <br />units at existing projects that will aced to be refilled or reoccupied <br />during the same fill -up time frame as (lie .subject project. <br />The bottom-line result ofthis analysis and screening process is to identify the net pool of age <br />and income qualified Senior households who are potential prospects for the subject project, The <br />required penetration rate for a project is then calculated by dividing; (lie number of units to <br />be absorbed in the market area by the number of net potential agelincortae qualified <br />" households in (list market area. Figure 1-1 presents a graphic depicting the penetration. <br />rateldemand model. (Defer to Exhibit 1-1 and Appendix A for the detailed penetration rate <br />calculations) <br />l:ev [lernarld MocieE_ i �'arjgbJes . Key input variables to the penetration rate/demand models <br />L included: <br />1. The total number of units to be absorbed. MOS has vvilowd the <br />pcnr1rauon rates for the fullownig unit counts: <br />• dQ Assistrrl Living Liths <br />80 A%%olyd t i%ing units <br />i <br />