Increasing demand for long-term care means that operators can realize solid returns on new construction, but they must gauge the potential for success on a market-by-market basis, according to the leader of the National Investment Center for the Seniors Housing & Care Industry.

“For seniors housing generally, and especially assisted living, it was a very strong third quarter,” said NIC President Robert G. Kramer. He spoke on camera with McKnight’s at the recent NIC annual conference in Chicago.

Occupancy in seniors housing is trending upward and reached 89.3% in the third quarter, according to NIC data released in conjunction with the conference. However, for operators to see continued success, demand will have to keep pace with the significant amount of new construction underway, Kramer noted.

Texas is a hotspot for new construction, according to NIC’s 2013 construction trends report. Dallas and Houston are ranked Nos. 1 and 2, respectively, for the metropolitan areas with the most properties under construction. Austin also was ranked in the top 20.

“There’s great opportunity out there,” Kramer told McKnight’s. But he used memory care as an example of why providers should be careful about where they choose to build. Some markets are seeing a glut of new memory care services, he said, while “many, many parts of the country” are being underserved in this area.