Q&A: Oppidan leader sees bright future in senior housing

Q&A: Oppidan leader sees bright future in senior housing

Senior housing has been a priority for Oppidan Investment Co. for several years, but recent demographic trends are encouraging the company to expand its investment in this type of housing even further.

Joe Ryan, the company’s CEO and founder, said the senior housing expansion is due to the nation’s aging population and the “great” business opportunity.

Oppidan has also invested in multifamily, industrial and retail developments to ensure it has a diverse array of investments, Ryan said.

Since founding the Excelsior-based company in 1991, Ryan has not only developed more than $3 billion in real estate, but he’s also expanded the company’s footprint outside of Minnesota.

He’s completed more than 420 projects across 35 states, which encompasses over 15.8 million square feet of space.

Most recently, Oppidan just opened the Watermark of Napa Valley, a senior housing project in California, and has several other senior living developments in various stages in the state as well.

Ryan graduated from St. Thomas University, with both a Bachelor of Science degree in Business Administration and a Master of Business Finance. Before starting Oppidan, he was a shareholding partner of REI and Limited, and directed the operations of Richard Ellis Inc.’s Minneapolis office. Additionally, he was vice president of asset management at St. Paul Properties Inc. Click here to listen to the audio podcast.

Q: Let’s start out by talking a bit about how you got started in development. What motivated you to get started in development?

A: I had no intention of being a developer when I started off. I was coming out of the asset management world. And I thought that [development] would be an opportunity to create some value in some existing real estate. And low and behold, I did none of that. A friend of mine … asked if I can help do a branch bank in Napa Valley. And that’s when we started our development business.

… It’s been a great run and we’ve enjoyed the business. It’s got a team of 42 people and we focus on development and development only. And we do … relationship-based [work] and it’s been very good.

Q: What’s your mission? What do you stand for?

A: We’re very community-oriented. We’ve got a family atmosphere here at Oppidan. And we have our philosophy at Oppidan: work hard, play hard. And we do that. We do that very, very well. … We’ve never done one deal with anybody – it’s always been repeat business and we’re excited to continue that.

I look in the future, it’s very bright. We’re going through some tough times here. And this pandemic has certainly caused great costs for everybody — personally and professionally. I don’t think we’ve seen the effects of that on the economic side. I don’t think that fallout is even in front of us at this point. I’m going to be watching out with a very curious eye and concern.

… We continue to be well-capitalized, focused on what we do well and continue to provide a product that is in demand. Now, our retail game was the number one in 2007. Today, it’s a very small percentage of our asset class, … and we now have significant investment in senior housing. It’s a great industry, and I think that, to me, is the core of what Oppidan’s about. Because that’s development with a heart and soul, and boy we love doing that business because we’re providing terrific service. Our residents are first and foremost. We’re a profit- generating company, but there we can provide comfort, love and security to our residents.

Q: Let’s pivot to senior housing. So I understand that you have increased your focus on senior housing, and I’m curious why that is.

A: That industry has got some great future demographic trends; that need and that demand is going to continue to grow. And that’s going to grow into the late 2020s. We know that we can’t change the aging of America. There’s a demand side there. … And the other part of it is it’s great business.

Q: Is this a long-term plan for you or is this short-term?

A: We’re in this game for a long time. This is a big part of our future. We’re committed to it and we continue to look for opportunities for finding it.  … We just opened a project in California. We have three others [and are] about to start one here shortly in Southern California. Two others in the California market, [we have some] in the Midwest and even on the East Coast. To think that we are looking at that diversification of geographies, in this industry, just tells you the commitment we have.

Q: Are there any challenges with branching into senior housing development?

A: The challenges are significant, because the markets are different. We started here in [the] Minneapolis-St. Paul market. Our first project was in Woodbury. What we built in Woodbury five years ago, compared to what we built on the University of Minnesota campus — The Pillars of Prospect Park — are woefully different products. … That markets that each of these communities are serving [have] very different needs, very different demands, very different expectations.

… We’re building what the market tells us to build. And we continue to try to refine what we’re doing. And we’re finding that the active lifestyle — the wellness component — is very important.

… And then COVID hits. What does that mean? How do we address that long term? How long is it going to be with us? … We had to make some adjustments in all of our communities. Now, should we be making those adjustments in that design phase [of] some of our more recent projects? Yes, I think we do. Now, we can’t go overboard. We shouldn’t go overboard. … The seniors [need] contemporaries to be with. And so we can’t distance up too much. And we can’t force that because that takes away the core of what these communities are about.

Q: What are your expectations for the coming year?

A: I look at this next year as being a year of continuing growth, continuing to learn and continuing to get better. Now, on paper, how are we going to do? Probably not that well. … But we’re prepared for it.

… One thing that we didn’t do in ’08 and certainly aren’t doing it today: We didn’t float on and say, ‘Let’s wait for the market to come back.’ We’re saying, ‘Let’s look for the right opportunities to enter the market, when they come forward.’ And that got us through in ’08 that will continue to keep us going strong in 2020.

Q: Is there anything else you want to add in or mention?

A: The good news is that there’s good news coming. You know what, this is tough. This is tough for the families that have children at home. This is tough for the elders that are passing and their families. This is tough as business owners [try] to manage through it. … But the good news is, the future’s bright. And we got to focus on the fact that the future is bright.

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