Over the past decade in particular, Omaha has witnessed the start of significant redevelopment projects. From Blackstone to Benson, Aksarben to Midtown to Dundee, a revival is underway in Omaha. And with construction having just begun on the Old Market’s Gene Leahy Mall, the city’s future landscape keeps marching into view. But in the shadow of these high-profile commercial initiatives, revitalization of Omaha’s residential real estate is in full swing, too. At Percipio Partners, we’ve positioned ourselves to be serious players in Omaha’s residential renaissance. As one of Percipio’s principals, I also serve as the COO of HD-Omaha, our property management group.
I manage the renovation process on our real estate assets, with the majority of my time spent overseeing the leasing group, the maintenance team and the renovation construction group. I love having that personal involvement, building a relationship with the men and women doing the work and keeping a connection to the property and its neighborhood. And what drives me in that process, what drives Percipio’s real estate investing philosophy as a whole, is staying focused on the community.
You can’t discuss the redevelopment of depressed properties without really understanding the difficulty of gentrification. Some see real estate developers coming into a low-income neighborhood, buying up and renovating properties, and think they are just looking to turn the market for a profit. But if you keep your focus on the community as a whole, as we do at Percipio, your investment’s long-term impact goes well beyond the balance sheet.
We typically focus on properties that, for decades, haven’t been kept up, because we see a gap between their present value and their potential market value. Unfortunately, these properties typically house lower income residents that are working hard to get on their feet and that will live in less than suitable or unsafe properties. On a couple of our renovations we have had residents who were excited to move back in when completed. But it doesn’t happen to the degree we would like, due to the cost associated with bringing these properties up to a safe and quality standard, and sometimes it does price folks out.
Still, my belief is that the work we are doing is necessary. We often encounter situations where someone may have bought a property 20 or 30 years ago and then did very little to keep them where they should be — they just enjoyed the lease revenue. But we are taking these properties that are depressed and restoring them back to their Glory days.
Over the past 3 years, Percipio has gone from 250 units to close to 500 units, between single-family homes and multifamily properties. We’ve purchased and renovated the properties and then handed them back to HD-Omaha, our subsidiary property management group. Our model is to put a significant amount of capital into renovations to bring each property up to at least a B+ or A-. This provides a benefit to us, because we can justify higher rents, but it also provides a significant benefit to our tenants, who get safe, quality homes to live in.
Recently, there was extensive local coverage surrounding an apartment complex in North Omaha: City officials investigated the apartments following a number of complaints, and after nearly 2,000 code violations were discovered, the units were declared uninhabitable and all the residents displaced. Stories like that should never happen; tenant safety has to be a high priority.
Percipio is not a company that is just out to make money. We really do care about creating a community where people are excited and happy to live, where they feel safe. There’s a fine line to walk between gentrification and social consciousness, but we are intentional to keep a wide price range throughout our properties. For some units, we work hard to keep a price point that helps the community. We still renovate these properties, and I believe we make them very nice, but we understand that revitalizing a neighborhood must not mean forcing all of its residents out — our goal is community development, not just property development. And we’ve been fortunate to develop strategic partnerships with some great community development organizations here in town, such as InCOMMON.
Twenty years ago, Omaha’s Park Avenue was a depressed part of town. Working alongside InCOMMON, we wanted to find a way to invest in the area, make it a place where families could feel safe and enjoy their neighborhood. We bought a house on the corner of Pacific and Park Avenue and chose to tear it down with InCOMMON to build a great family park. It was a big community event, and now it’s a centerpiece of the neighborhood: a place where you can walk by and see kids playing, unlike 15 or 20 years ago.
As we look back so far on what we have accomplished we are so thankful for our team and our community family. We have so enjoyed the redevelopment of this wonderful landmark in Omaha called “Park Avenue.” And as we look to future projects, we will remain committed to people, not just profits, because we believe our business is best served when we are serving the community.