CHEVY CHASE, MD—New development will offer the greatest investment opportunity in seniors housing over the coming year, according to a Capital One survey of professionals in the sector. However, tempering their enthusiasm for development, survey respondents cited potential overbuilding as their top concern for the next 12 months.

“Interest in the development of senior housing assets continues to grow," says Imran Javaid, managing director, healthcare real estate at Capital One. "However, balancing interest in new development with concerns about potential overbuilding requires working closely with financing partners to navigate this evolving landscape. In this market, it is critical to conduct in-depth due diligence and sub-market analysis which could make or break potential developments."

Forty-one percent of survey respondents said that new builds topped the list of investment opportunities, followed by 26% who identified repositioning of older properties as the best opportunity. On the other side of the coin, 35% expressed concern about overbuilding, followed by 20% who worried about the influx of new capital continuing and 19% who flagged the potential impact of higher interest rates.

Especially lopsided is the percentage of survey respondents who expect the pace of mergers and acquisitions activity in seniors housing to increase over the next 12 months. Sixty percent said they believe M&A activity will increase, compared to 29% who expected it to stay flat, a ratio of better than two to one. Capital One conducted the survey at last month's IMN Real Estate Private Equity Forum on Senior Housing in Los Angeles