Omega Communities, based in Birmingham, Alabama, is differentiating itself in the development arena by focusing on the company’s relationships in the faith-based community. Combining the investment opportunity in senior housing with the affinity of “dynamic, impacting churches” presents benefits that investors are likely to find both substantial and sustainable, according to Omega. At the same time, church partners fulfill their mission of ministering to seniors in their local communities—and share in operating revenues. The company’s “affinity relationship” model for developing senior living communities requires a sponsoring church that meets “strict financial and impacting criteria,” often including unencumbered land available to contribute to the project. In addition, a market study performed by a qualified national expert (e.g., Cushman & Wakefield) must corroborate the need for the project.
Omega’s first community developed under this new initiative is now underway in Sarasota County, Florida. Once complete, Springs of South Biscayne, situated on the campus of South Biscayne Church in North Port, will include 95 assisted living apartments and 35 memory-care units. Financing for the $24.5 million project was structured by H.J. Sims and includes $21.8 million in tax-exempt senior drawdown bonds purchased by a single investor (Orix), along with $2.7 million in tax-exempt subordinate bonds. The drawdown feature reduced the required capitalized interest funding by more than $1.5 million dollars, according to Sims.
Church sponsors will have no management or ownership role in the senior living communities developed under this new Omega model; LCS will manage operations for each project. Church partners are, however, allocated a percentage (10-25%) of the net distributable cash flow (after debt service) of the project upon stabilization. Omega already has long-term relationships with hundreds of churches, pastors, and senior church staff. And over the next several years, the company intends to develop, own, and operate a collection of about 50 senior living communities through both development and acquisition.
