When one thinks of overdevelopment in seniors housing, Omaha, Nebraska doesn’t typically come to mind right away. Nonetheless, the effects of the building boom in senior living communities may already be beginning to show in Nebraska’s largest city, with occupancy (we hear) weakening in certain parts of the city. NIC MAP also shows this trend, with penetration rates for independent living and assisted living (which often includes memory care units) at 5.3% and 8.2% respectively. According to NIC, construction for assisted living is also hot in that area, with new construction representing 13.6% of the current inventory in the area. Two Omaha-based developers have recently broken ground on senior living communities in the city: Heritage Communities, which currently has eight properties open in Nebraska, Iowa and Arizona, and Dial Retirement Communities, which currently has 10 communities open in Nebraska, Iowa and Kansas. Heritage has two properties under construction in the city: Heritage at Sterling Ridge (107 units, with 32 IL, 53 AL and 22 MC) costing $179,000 per unit and opening in March 2015, and Heritage at Legacy (121 units, with 52 IL, 46 AL and 23 MC) costing $175,000 per unit and opening in June 2015.
To finance the construction of these properties, Heritage turned to Sioux Falls, South Dakota-based Great Western Bank for Sterling Ridge, and Spencer, Iowa-based Northwest Bank for Legacy. While Dial plans to open a $30 million senior living community in Fall 2015, to be named Aksarben Village (136 units with 49 IL, 60 AL and 27 MC). For Heritage, the potential building boom in the city doesn’t seem to have an effect on its Sterling Ridge community for the time being as the company has already pre-leased 100% of its independent living units, and a good chunk of its assisted living units. But, if occupancy is already showing signs of dropping in Omaha, where will we see it next?
