By Beth Mattson-Teig | National Real Estate Investor/AZBEX
The development boom underway in the seniors housing space has not put a damper on confidence. Exclusive survey results from the fourth annual NREI / NIC Seniors Housing Market Study indicate a more positive outlook across the board on questions related to improving fundamentals, access to capital and transaction pipeline.
The steady stream of new supply being added to the market has been a hot topic of conversation across the industry, and a majority of respondents (59 percent) expect to see a further increase in construction starts over the next 12 months. That is a notable increase over the 45 percent who held that view a year ago. Overall, 26 percent of respondents believe that construction starts will remain the same, while 15 percent predict a decline.
Current construction as a share of existing inventory for seniors housing preliminary maintained a robust pace of 5.8 percent in the second quarter, which is 0.8 percent below its recent high of 6.6 percent in the third quarter of 2016. Despite the new supply already added, and more on the way, 80 percent of respondents said they do not think that new construction will lead to overbuilding.
