March 7, 2017

Koelsch sells Kirkland community for $13M; plans memory care facility

Images by Koelsch Senior Communities [enlarge]

Jefferson House will have 60 memory-care units when it opens next year.

[enlarge]

Madison House, renovated in 2015, has 146 independent and assisted-living units.

In 2014, an LLC associated with Koelsch Senior Communities of Olympia paid $12.5 million for the Madison House independent and assisted-living community in Kirkland.

Located at 12215 N.E. 128th St., south of Evergreen Hospital, the six-acre property was developed in 1978. The three-story Madison House has 146 units and about 107,000 gross square feet. It is east of Interstate 405 and the Totem Lake Mall, which the city of Kirkland is redeveloping with more housing.

At the time of the last sale, CEO Aaron Koelsch said his family-owned company would invest $3.5 million to upgrade the facility. Those improvements were completed in 2015, when Madison House celebrated a grand reopening.

Now Madison House has sold again, but the deal is a little different this time. Last year Koelsch subdivided the property for a planned memory-care facility called Jefferson House on the new 1.77-acre parcel. Meanwhile, King County records show the recent sale of Madison House for $12.9 million to VTR Madison House LLC, which is associated with Chicago-based Ventas, a large healthcare REIT.

As part of the sale agreement, Jefferson House will be restricted to use as a memory-care community. Expected to open next year, and to share an address with Madison House, the three-story, 70,900-square-foot facility will have 60 assisted-living units.

Jefferson House will be owned and operated by Koelsch, which will continue to operate Madison House while leasing the property from the Ventas LLC. (Koelsch didn't confirm by press time as to whether it also has an interest in that LLC.)

Koelsch sister company RJ Development of Olympia is developing Jefferson House. Koelsch will act as its own general contractor. The late Richard M. Swanson was the architect.

The same team is now building the Cedar Creek memory-care community in Edmonds, which is scheduled to open this summer. Founded in 1958, Koelsch now owns or operates 22 communities in seven states, with eight communities in development.