Pandemic dealt blow to senior housing, but Oppidan keeps building more
The Covid-19 pandemic rattled the senior housing market, but Excelsior-based Oppidan Investment Co. managed to keep its momentum going.
The developer, whose entry into the senior housing market only dates back to the middle of the last decade, opened two of its largest senior communities yet during the pandemic and started construction on a third. The pandemic was a gut-check for senior housing developers, but Shannon Rusk, senior vice president of senior housing development for Oppidan, said the company remains “very bullish” on the market.
“We kept our heads down and kept rolling, because we understand the market, we understand the demographics, we understand the Baby Boomers are coming no matter what occurs in the world. So, we kept going,” Rusk said.
Oppidan’s two senior housing projects completed during the pandemic include The Pillars of Prospect Park, a 283-unit facility that opened in May 2020 in a walkable neighborhood on the edge of the University of Minnesota campus. Like Oppidan’s other Minnesota senior housing projects, The Pillars of Prospect Park is operated by Edina-based Ebenezer Senior Living.
The second project to open during the pandemic is The Watermark at Napa Valley, a 173-unit facility in northern California that in July was named a winner at The Gold Nugget Awards, an architectural competition that coincides with the Pacific Coast Builders Conference, an annual tradeshow.
Nationally, senior housing occupancy declined during the pandemic to its lowest levels in at least five years, according to a Q2 2021 report on the senior housing market by real estate firm CBRE. Rusk estimated that a 5% dip in occupancy was common among the type of Class A, newer-construction facilities in its portfolio.
“All of our communities have recovered that 5% and then some,” she said.
The CBRE report also tracked an uptick in occupancy rates following the vaccine rollout, signaling that the pandemic-induced decline may have already hit bottom. The nonprofit National Investment Center for Seniors Housing & Care reported more than 90% of senior housing community residents nationally were vaccinated against Covid-19 as of mid-April.
CBRE goes on to note that new construction in the sector has been “muted” for four consecutive quarters. Factors include the dip in occupancy senior housing facilities experienced during the pandemic as well as a pullback from lenders and high construction material costs.
Oppidan, though, is on track to double its senior housing portfolio to 14 facilities, Rusk said.
The current count includes six Pillars senior living communities in Minnesota (in Minneapolis, White Bear Lake, St. Paul, Excelsior, Mankato and Grand Rapids, which is under construction), plus the Napa, California facility.
Construction has started on two others, and Oppidan is preparing to break ground on five more, including one Rusk said would be located in the southern Twin Cities suburbs. Upcoming projects also include Oppidan’s first East Coast senior-housing facilities, she added.
Rusk said Oppidan is likely to incorporate lessons learned during the pandemic into future projects, including separate entrances for employees, upgraded ventilation technology and even simple measures like touchless faucets. They raise the cost of opening and operating a facility, but they’re worth it, she said.
“We feel like it’s been a really good change in operations,” she said.
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