A major multifamily development marks the first foray into the Omaha market for Sioux Falls real estate investment firm Ernst Capital Group. Cherry Creek Village sits on 60 acres on Omaha’s west side near Potter Street and Highway 133. “We’ve been interested in entering the Omaha market for a while, and this site allows us to deliver what we think the market is looking for,“ said Chris Daugaard, a partner in Ernst Capital. “It has direct access to I-680, and you can get to the rest of the metro area very easily. It’s a place for people to enjoy a quick commute and allowed us to get into a large land development while keeping costs down to help the project be most effective.”

Ernst Capital, which offers private real estate investments for accredited investors, partners with developers to assist in financing. For Cherry Creek Village, Ernst Capital partnered with Sioux Falls-based Signature Cos. on the apartment development, which will be managed by Sioux Falls-based Lloyd Cos. “We have long, positive histories with both companies, which gave all of us confidence heading into a new market,” Daugaard said.

“We’re building units here that are attractive to renters but still offer an attainable rent price point. We think there’s a ton of demand for that regionally even in areas where there’s a lot of supply. We’ve been able to lease up well because even while residents are more price-sensitive, they still want a place that’s nice, and we think we hit a healthy medium.” The concept at Cherry Creek Village is similar to Willows Edge in northeast Sioux Falls and other Signature developments that also offer a range of housing styles. It started with 203 garden-style apartments across five buildings, offering studio through three-bedroom floor plans.

A clubhouse will offer an outdoor pool and community gathering spots with a golf simulator, fitness center, coffee bar and gaming area. “We’ve done this same building type in eight other regional developments, so we know what we’re building, Signature has a team that’s very familiar with it, and we’re able to utilize some of our subcontractors who have worked on previous projects,” Daugaard said. The first two buildings are about 80 percent complete, along with the clubhouse. The plan is to turn over the first units in July. Future phases will include additional garden-style apartments as well as townhomes. “There’s about 48 usable acres for development because of some great topography in the area, with a really nice creek running through it. We’re retaining a wooded area around it, so it’s a really attractive larger development site that will lend itself to outdoor recreation,” Daugaard added.

“As we were talking to potential lending partners, we kept hearing that our rent projections seemed to be conservative, so we think there’s potential for rent upside after lease up.” “Omaha is somewhere we plan to be over the long term, and once Cherry Creek gets more mature, we’ll look at additional sites.” He anticipates Ernst Capital could put together investments for more than 1,000 units in the Omaha market in the next five to 10 years. “We look at it as an expansion market, much like we did with Des Moines in 2014, and now about a third of our portfolio is in that market,” Daugaard said. “It’s a conscious decision to look at regional markets that are similar in size where we like their future growth opportunities. It just made sense as a natural market for expansion.”

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Tami and Craig McKenzie have marked 10 major moves in their 42 years of marriage — but the latest led them home again. “I grew up in Sioux Falls, but my husband and I have been in the desert 24 years, and we just were far from family and knew we weren’t getting younger, so if we wanted to move closer to family, we needed to make that decision,” she said. But Sioux Falls is a significantly different place from when she grew up on the west side. So before committing to something permanent, it made sense to rent and get a feel for the community. “My sister-in-law was kind enough to connect us with an agent through Lloyd Cos., and we were able to see some rental properties last summer,” McKenzie said. “At that point, we talked about Willowbrook, and I said, ‘OK, here’s our minimum size requirement for a new place to live, we’re going to get our house on the market, so keep up apprised, and we’ll keep our eyes open.’”

It wasn’t long after that she saw a story on SiouxFalls.Business and was prompted to circle back and see if a three-bedroom property was available at Willowbrook Village. “We were able to find a home being built at Willowbrook that was close in size to what we had in Tucson,” McKenzie said. “We were thrilled this came available because we sold our house only two weeks after coming on the market.”

Willowbrook Village at 6544 E. Pine Grove Place is northeast of Veterans and Arrowhead parkways. The business model, while not unique nationwide, is the first fully build-to-rent community in Sioux Falls, offering single-family detached homes available to rent. The McKenzies moved late last October into a three-bedroom rental home with a walkout basement. “What we’re starting to find is that it’s a good option for both permanent residents and empty nesters or people looking to not necessarily be in Sioux Falls all the time,” said Chris Daugaard, a partner in Ernst Capital Group, which put together the investment for the development. “It’s a good option, where they have a stand-alone home, their own garage, no shared walls or halls, but they also can lock the door and leave when they want to, knowing that others are taking care of the details. They can sign a lease and try out the lifestyle without committing to buying it.”

Willowbrook Village was part of Ernst Capital Group’s recently closed Signature Fund VI, which put together two multifamily development investments for Signature Cos. totaling just under $50 million in real estate. Of the 45 homes available to lease in the Willowbrook property, 41 are already pre-leased, with 12 homes still under construction. “It’s a rental home, and it’s brand-new,” Daugaard said. “People are impressed when they go through. It feels more like a nice, newly built spec home. They’re very nice finishes, and we’re able to offer it at a rent price that is accessible for many people but still works for the project.”

Willowbrook residents rent either a two- or three-bedroom home with an attached two-stall garage. Snow removal, trash, lawn care and all maintenance are covered by the rent. “It’s a great part of town to be in, and more development is occurring coming all the time along Veterans Parkway and Highway 42,” Daugaard said. As an investment property, Willowbrook Village is structured such that at some point in the future, the homes can be sold to owner-occupants, or it could change hands as an entire complex. The McKenzies were happy that their first winter out of Arizona was a mild one, but they still appreciated snow removal from their property management team and are looking forward to becoming reacquainted with the community Sioux Falls has become. “We haven’t gotten to know our neighbors too much at this point, but everyone waves, and some people have stopped to talk, and they’re very nice,” McKenzie said. “The management is very good here, and it’s nice not to worry about another move for at least a couple years. I grew up here, and it’s nothing like it was, so there’s a huge learning curve.”

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