With New Pivot to Development, Ebenezer CEO Aims to Expand Co-op Model’s Appeal

Ebenezer is pivoting from just managing senior housing cooperatives to also developing them — and it may be just the start of what President and CEO Jon Lundberg hopes to achieve with the product type.

Though it has only been a matter of months since leaders with the Edina, Minnesota-based operator launched the new senior co-op Estoria Cooperatives brand, those plans are already starting to come together.

With the concept underway, Lundberg is peering into the future, and thinking about how the product type will evolve over time.


Although senior housing co-ops are currently a niche product type and are mostly found in the upper Midwest, Lundberg believes there are opportunities to expand into new states and compete with other kinds of lower-acuity senior housing, such as active adult communities.

Ebenezer, which is an affiliate of Fairview Health Services, develops, consults and provides management services to 101 senior housing communities throughout Minnesota, Iowa and Wisconsin, including more than 60 senior housing co-ops.

While Ebenezer is currently known in the industry for its senior housing management services, development is in the organization’s DNA. In fact, the operator’s former president, A. Luther Molberg, developed what is considered the first senior housing co-op in Edina, Minnesota, in 1978.


In the decades since, senior housing co-ops have become a senior housing niche, with communities serving only a small subset of the total market. But Ebeneer is looking to pioneer the product type in another way: By growing the model’s appeal with other prospective residents through the Estoria brand, possibly in places other than Minnesota.

“Our focus is on developing the brand, that is a quality brand that meets the best needs in the marketplace, and that can stand on its own,” Lundberg said. “The rest of it will take care of itself.”

Estoria takes shape

Ebenezer’s shift from primarily managing senior housing co-ops to also developing them was not a hasty decision.

“It’s not something that came out of the blue,” Lundberg said.

The operator’s leaders spent years pondering whether to jump back into development, but it wasn’t until the pandemic that they began to think seriously about it, Lundberg said. Specifically, they saw how well senior housing co-ops supported residents and created a real sense of community. Operators in the space also saw strong demand and relatively flat expenses over the past two and a half years.

Unlike a rental senior living community, residents in the co-op model buy shares in a corporation that owns the building, allowing them to lease a specific unit within a building and utilize common areas. Residents will usually pay a monthly fee for assessments, maintenance and repairs and have voting rights over community decisions. They also have more control over customizing their units than a typical senior living resident.

It was the ownership component that made the difference for many of the operator’s residents — and in how they treated one another, according to Lundberg.

“When the people that live in the building are the owners of that building, when they are truly tied in and bought into the operation, they think differently about their neighbors and how they interact,” he said.

At the same time, Lundberg has seen a rise in popularity of lower-acuity product types such as active adult, and in developing them. And he believes senior housing co-ops can meet residents’ needs in a similar way.

“We think this is one of the critical models of independent housing that has even greater value,” Lundberg said. “As we stepped back and looked at all those things together, we said, ‘We need to move on this and we have various opportunities, so let’s take advantage.’”

Growing the model

Under the Estoria model, residents — also referred to as members — will have their pick of units ranging from 970 square feet for one-bedroom units to 1,765 square feet for units with three bedrooms and two bathrooms.

The first Estoria project is an 89-unit community coming together in Lakeville, Minnesota. The community is planned to have a slate of amenities typically found in rental active adult, such as a yoga and fitness center, golf simulator, pub, bike storage and repair space, an art studio and pickleball courts.

While costs vary from project to project, a typical senior housing co-op project costs $30 million to develop in 2022, with funding coming from the Department of Housing and Urban Development (HUD), Lundberg said. The community won’t move forward with construction until 60% of the homes are sold, which he projects will happen “at least by next spring.”

Beyond the community in Lakeville, Ebenezer has plans to undertake development of a handful of co-ops at a time.

“Our goal is, as we start getting the flywheel spinning here, that we’ll have two or three going at a time so we can just keep everything flowing from one to the other,” Lundberg said.

Possibly complicating those plans is the fact that the U.S. economy may enter a recession in the coming weeks or months. If that affects home prices, that could in theory affect demand for senior housing co-ops, as residents often use their home equity to buy a unit.

But Lundberg is heartened by how the organization performed during the Great Recession in 2008, and he believes that Ebenezer would also weather a similar economic downturn in 2022.

At the end of the day, the senior co-op model is still relatively limited to the upper Midwest, such as in Minnesota and Wisconsin. Outside of those areas, it’s still a relatively niche product — but that, too, might be changing.

“As people sit down, look at what their options are and evaluate them, they see that this is really a true value, whether they’re looking at it in terms of their ability to be engaged … or they’re looking at the different tax benefits of ownership,” Lundberg said.

And if residents can see the value of senior housing co-ops, he believes Ebenezer can expand the model well beyond its backyard.

“The cooperative model is something that is a little bit more well known in the Midwest, and so some of the sales around the concept may be a little bit easier because of that,” he said. “But I think as the product matures, more and more people will become interested in it.”

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