For a PACE operator, the facility location has to support the population the program intends to serve, the transportation network that brings participants to and from the center, the physical requirements of care delivery, and the economics of developing the facility. It can also affect which sources of project capital are available. A property that looks attractive based on price and square footage can become difficult to develop once these factors are examined together. Effective PACE site selection therefore starts with the operating model and works backward to the real estate.
PACE Site Selection Starts With the Service Area
The first question is not necessarily which buildings are available. It is whether a location makes sense in relation to the operator’s service area and participant population.
PACE eligibility requires participants to live within the organization’s designated service area. The National PACE Association also identifies the actual location of a PACE center, including distance and drive times, as a factor that can affect enrollment. The center’s location and service area need to be considered together rather than treating site selection as a later real estate exercise.
This changes how operators should evaluate a market. A lower-cost property at the edge of the target area may create operational disadvantages that outweigh the real estate savings. Conversely, the geographic center of a service area is not automatically the right answer. Operators need to understand where prospective participants live, how easily the center can be reached, and how the location fits the broader network of care.
Service-area documentation considers geographic boundaries, major traffic arteries, physical barriers and travel time, as well as the locations of the PACE center and hospital providers.
Transportation Is Part of the Real Estate Decision
Transportation deserves particular attention because it is part of the PACE operating model. PACE programs provide transportation between participants’ homes and the center, as well as transportation to other healthcare appointments.
That means a site’s accessibility cannot be judged by the standards used for a conventional medical office. Operators should consider actual drive times across the service area, traffic patterns, difficult intersections and physical barriers that can complicate routes. A site should also accommodate the daily movement of PACE vehicles without creating conflicts at the entrance, participant drop-off areas or parking lot.
The property itself matters just as much. Vehicle circulation, accessible loading and unloading, parking, pedestrian safety and sufficient room for the transportation fleet can all influence whether a property works operationally. These details are easier and less expensive to address during site selection than after a lease or purchase agreement has been signed.
Evaluate the Building Against the Care Model
A PACE center has requirements that differ significantly from those of a typical medical office. The facility may need a commercial kitchen, clinic, therapy space, day room, administrative areas and space to support participant transportation. Those uses have to function together efficiently, which can quickly eliminate buildings that otherwise look suitable based on size and location.
For an existing building, available square footage tells only part of the story. Operators should consider the floor plan, entrances, utility capacity and site configuration before moving too far into negotiations. A building with an attractive lease rate may require extensive improvements to support PACE operations.
Ground-up development offers more control over the layout and site plan. However, it also introduces questions around utilities, entitlements, site work and construction costs. In either case, the better comparison is total development feasibility, not simply the asking price or cost per square foot.
Site Conditions Can Change the Project Budget
Two properties with similar asking prices can produce very different development costs. Zoning, environmental conditions, utility infrastructure, grading, drainage, off-site improvements and entitlement requirements can all affect the actual cost of opening a center.
Due diligence should begin early enough to influence the site decision. That may include reviewing title and survey information, environmental conditions, geotechnical issues, utilities, zoning and entitlement requirements. For an existing building, the investigation also needs to address the condition and capacity of major building systems.
This is particularly important when operators are comparing a retrofit with ground-up development. A building that initially appears to offer a faster or less expensive path can lose that advantage if substantial structural, mechanical or site work is required.
Capital Eligibility Should Be Screened Before Site Control
One of the less obvious considerations in PACE site selection is the relationship between location and financing.
PACE projects may use a combination of conventional debt, CDFI lending, private equity, mission-oriented capital and tax-credit programs. Capital Rivers Commercial’s current PACE development approach includes screening potential locations for New Markets Tax Credit eligibility and census tract distress designations early in the process. Those qualifications can differ between nearby properties, making the address itself relevant to the potential capital stack.
That does not mean financing eligibility should drive every site decision. It does mean operators should understand it before committing to a property. A site that satisfies the operational requirements while also supporting additional financing options may create considerably more flexibility as the project advances.
The broader capital strategy matters as well. Depending on the operator’s balance sheet and objectives, a project might be structured through fee development, a joint venture, or a build-to-suit and lease arrangement. Capital Rivers’ PACE work uses these structures on a project-specific basis rather than applying one financing model to every facility.
How Should PACE Operators Evaluate a Potential Site?
A disciplined process helps prevent a promising property from advancing too far before a major constraint is discovered. The specific diligence will vary by market and project, but operators can organize early PACE site selection around five steps.
- Map the participant population and service area. Understand where prospective participants live and how the proposed center fits the geographic area the program expects to serve.
- Test transportation and site access. Evaluate drive times, major routes, physical barriers, vehicle circulation, participant drop-off and fleet needs.
- Confirm facility feasibility. Determine whether the site can support the clinical, therapy, day health, food service and operational requirements of the program.
- Complete development and capital screening. Review zoning, utilities, physical conditions, entitlement risks, preliminary project costs and location-dependent financing opportunities.
- Compare total project outcomes. Evaluate candidate sites based on operating efficiency, development cost, schedule, capital requirements and long-term flexibility rather than real estate cost alone.
This process also needs to account for the applicable state approval path. The Centers for Medicare & Medicaid Services (CMS) requires approval processes when PACE organizations add centers or expand geographic service areas, and state-level requirements can add further considerations. The sequence of site control, approvals, entitlements and construction should therefore be established before the operator makes commitments that are difficult to unwind.
Bringing PACE Operations and Real Estate Together
Strong PACE sites align the operator’s care model, service area and transportation plan with the realities of the property. Development costs, approvals and financing also need to support the project. That requires coordination among operations, finance, clinical leadership and the development team early in the process.
Capital Rivers Commercial works with PACE organizations at this intersection of real estate, development and capital. Our work includes site selection, feasibility, entitlements, capital coordination, construction and turnover. We have experience with both ground-up and retrofit PACE facilities and are a member of the California PACE Association (CalPACE). Our current development work also includes alternative care settings designed with future PACE conversion in mind.
Summary
PACE site selection requires operators to consider far more than building size, location and occupancy cost. The service area establishes the geographic framework, while transportation determines how that geography functions in practice. The property must support specialized care delivery without creating unnecessary development costs or operational compromises. Early diligence should also address entitlements, infrastructure, project costs and location-dependent financing opportunities. Looking at these factors together gives operators a stronger basis for comparing properties and selecting a site that can support the program over the long term.
Capital Rivers Commercial helps PACE operators evaluate and deliver facilities from site selection through construction and turnover. If your organization is planning a new PACE center, entering another service area or comparing potential sites, contact our development team to discuss the real estate and development strategy behind the project. We can help evaluate potential locations before site decisions limit the project’s operational, development or financing options.
