I just read an interesting new article out of California.
IRVINE, CA—Senior housing continues to rise as an asset class, and the industry is catching on. Auction.com reports that deal volume has increased 60% year over year, and as the Baby-Boomer generation hits retirement age, demand is only expected to increase. But is it in danger of being overbuilt?
The firm’s EVP Rick Sharga spoke with GlobeSt.com exclusively about what we should know about this topic.
GlobeSt.com: How much of a threat is oversupply in the senior housing market?
Sharga: There’s a small chance that we might have a short-term oversupply of senior housing as this growing market sorts itself out. But realistically, investments in this sector are simply getting back to more normal levels after a few years of below-average growth. The real question is how good a job the industry will do meeting the future needs for various segments of this category: will there be too much assisted-living inventory and too few nursing homes? Forecasting how much need/growth there might be in each of these sectors is going to be challenging because there’s really no existing model to use as a reference.