Everyone’s losing their minds over AI right now.
VCs are hurling bricks of cash at anything with “AI” in the pitch deck. Tech maximalists are convinced we’re living through the next iPhone moment. And they’re probably right – it’s clear that AI is going to be transformational.
But here’s the problem: it’s basically impossible to pick the winners this early.
So investors are doing what they always do when faced with FOMO and uncertainty: spraying money everywhere and hoping something sticks. It’s the classic “we know something big is coming, we just don't know what” problem.
Which brings me to a very different kind of opportunity. One that doesn’t require this “spray and pray” method of investing.
The Math Doesn’t Lie
Marcus & Millichap just released research that further validates something I’ve been tracking for a while now: the Baby Boomer real estate opportunity is massive.
Over the next five years, seven million people will turn 65. That’s like adding the population of Arizona to the 65+ age group. In just five years.
Unlike predicting which AI startup will be the next Google, demographic trends don’t require speculation. People get older. It’s one of the few certainties in investing.
Healthcare Consumption Goes Parabolic
The average 18-44 year old visits the doctor twice a year. Hit 65? Seven visits annually. And it only accelerates from there.
So if we’re adding seven million people to the 65+ population, Marcus & Millichap estimates that will create 23 million additional annual doctor visits in the next five years alone.
And that’s before we talk about the over-80 population, which is growing 4-6% every single year and consumes the overwhelming majority of acute care services.
So from this, I see two blindingly obvious real estate opportunities.
Opportunity #1: Medical Office Buildings
Medical office space construction simply isn’t keeping pace with demand. We saw decent building activity last year, but it’s nowhere near enough to handle the coming wave of healthcare consumption.
And you know what happens when demand meets a supply crunch.
Vacancy goes down. Rents go up. Cap rates compress. Values rise.
Medical office buildings are positioning to be one of the best real estate development and repurposing plays of the next decade.
Opportunity #2: Senior Housing
This one’s even more dramatic.
Senior housing (everything from retirement communities to assisted living to skilled nursing) is primarily occupied by people 75+. And that’s going to be the fastest-growing demographic segment over the next decade.
Here’s the two-prong challenge we’re facing:
We need roughly 600,000 new senior housing units over the next five years just to meet that coming demand
But construction peaked in 2019 at only 60,000 units delivered
This means we’d need to double the previous construction record for five straight years just to keep pace with demand.
Clearly, that’s not going to happen. Which means we’re looking at a massive supply-demand imbalance. And what happens then?
Vacancy goes down. Rents go up. Cap rates compress. Values rise.
The Inevitable Wave
Unlike gambling on which AI company will dominate, this opportunity is visible from a decade away, no guessing required. The Baby Boomers are aging whether we like it or not, and they’re going to need places to live and receive care.
This isn’t about timing the market perfectly (though I do think now is a good time to start positioning). It’s about getting in front of an inevitable wave.
What This Means for You
We’re not abandoning multifamily or our other plays, like oil and gas and private credit. But senior housing and medical office are likely to be massive wealth creators over the next 10+ years for the investors who see what’s coming and act on it.
We’re already talking to operators in both spaces to bring some deals to our passive investors.
While everyone else is chasing AI unicorns, there’s a more concrete opportunity sitting right in front of us…one backed by demographic certainty, not speculation.
The Silver Tsunami is coming. The question is whether you’ll be positioned to ride the wave.