Koelsch Builds Near University With Intergenerational Connections a Goal
A new Koelsch Senior Communities project underground in the Vancouver, Washington area is sending senior living residents back to college — or, at least close by.
The project, University Village, is located less than a mile from the Washington State University’s Vancouver campus and just blocks away from a regional hospital. .
As planned, the community will consist of 266 total units for independent living and assisted living, including some cottages. Currently, the community is 40% pre-leased, Koelsch confirmed, with the community supporting over 200 employees on campus once fully operational.
The project marks the fifth community in the Vancouver area for Olympia, Washington-based Koelsch since 2018 and represents a $115 million investment.
While there is no formal relationship between the operator and the university, CEO Aaron Koelsch said the project is a potential jumping-off point for collaboration between the two, especially with regard to intergenerational programming between college students and senior living residents.
“We saw it as an opportunity,” Koelsch said. “We have a very warm working relationship.”
University Village by Koelsch Senior Communities / Image Courtesy Koelsch Senior Communities
Company leaders are currently working with university staff and collegiate department heads in search of new ways to work together. The senior living operator also has a designated learning coordinator role to help facilitate academic opportunities for residents, both inside and outside of a typical classroom.
“There’s a number of things we can take advantage of,” Koelsch said.
He added that there may be opportunities with other colleges nearby across the Columbia River in Oregon, including the University of Oregon and Oregon State University.
Building partnerships with academic institutions in senior living is nothing new, but the trend is quickly gaining momentum as intergenerational living concepts gain traction in the industry.
In the future, Koelsch said he anticipates many of the University Village’s residents would attend classes at WSU-Vancouver, noting that it was the company’s responsibility to promote lifelong learning. He also sees residents taking continuing education classes online and in-person to deepen their knowledge or build upon hobbies,
“We want to celebrate that,” Koelsch said. “We want to make those things happen because we have so many opportunities around us.”
Operational update
While 2020 was a “gigantic punch in the face,” Koelsch said last year was a “gigantic rebound” for the company, as the operator saw a 1,100 basis-point increase in occupancy compared to its pandemic lows seen two years ago.
This year alone, occupancy has rebounded by 400 basis points, with the company’s stabilized assets reporting an average occupancy of 78%, a substantial increase from the near-60% rate pandemic low. And looking ahead, Kolesch estimated the portfolio could be over 80% stabilized occupancy in 1Q23. A third of the company’s communities range at near full occupancy of 98%, and are reporting strong margins.
Margins within the company’s memory care sector are around 34%, with that figure jumping to 49% within its IL portfolio, Koelsch added.
Operators across the industry have raised rental rates in response to cost inflation and other pressures, with Koelsch reporting an 8% to 9% rate increase.
Regarding growth, Koelsch said the company had put future development “on hold for the moment” as the operator looked to shore up existing properties.
While the University Village project nears completion, a $100 million campus development in Bellevue, Washington is also underground that is expected to open in 2Q23. And Koelsch has his eye on more growth beyond that.
“We want to see what settles here in terms of inflation,” Koelsch said. “There’s plenty to do coming out of the pandemic, frankly.”