Making your multifamily eco-efficient

Today’s apartment communities are demanding eco-efficient systems
Here’s why multifamilies should embrace sustainable solutions

In addition to attracting and maintaining tenants, satisfying state regulation and ensuring all-around safety, your ultimate duty as a multifamily operator is to turn a profit. It’s rare that any one investment is capable of fulfilling these diverse aspects of successful Commercial Real Estate management. So—what’s the magic solution?

Sustainability.

Experts now report that energy-efficient upgrades are among the most lucrative changes you can make to a property. As U.S. lawmakers continue to draft more stringent energy policies, renters are also becoming increasingly savvy. With a passion for health, wellness and minimalist philosophy (see downshifting), people are willing to pay more for a building that observes eco-conscious initiatives.

“In 2019, more states joined California and Hawaii in setting 100% clean energy targets, including Nevada, New Mexico, Washington, New York and Maine. More than half the states have committed to sustainability,” says Roxana Baiceanu of Commercial Property Executive. “For multifamily operators, the gains from implementing energy-efficient solutions are numerous.”

CRE Green Savings Stats

• According to ACEEE, buildings can enhance their energy efficiency by 15% to 30% with just one simple upgrade

• Most operators recoup their investment cost in just 1-3 years; best of all, the savings continue to collect for many more

• In a recent poll, renters said they were willing to pay $31 more a month if the building adopted “green initiatives”

• Renters also emphasized their commitment to recycling programs, with most willing to pay up to $26 extra a month

• 75% of all respondents also expressed interest in the building’s green certifications, such as LEED
                                                                                                           **Stats reported by CP Executive and NRE Investor

5 eco-considerations

Despite such compelling outcomes, many multifamily operators delay their sustainable journeys due to financial stress, uncertainty, and even sheer ignorance. Luckily, there are green gurus available with a specialized focus in upgrading apartment communities. While assessing your own property, consider the Five Ws, CRE edition:

Who?

Whether you’ve inherited a decades-old building or plan to develop from the ground up, experts say eco-efficiency is universally beneficial. While new buildings are usually green by design (given new code requirements), older apartments can still cash in on the trend.

“Renters who live in class-B and class-C buildings may be especially concerned with sustainable design features like energy efficiency, provided they pay for their own utilities,” says Bendix Anderson of NRE Investor. “Anecdotal evidence from developers and property managers shows renters often expect their homes to be as energy efficient as possible—even if the building is far from meeting any recognized standard for sustainable design.”

What?

A building’s sustainability encompasses numerous aspects of its makeup, both tangible and intangible. Here’s a brief sampling of today’s most popular (and cost-effective) features:

• Energy-efficient appliances
• Energy-efficient HVAC
• Green windows
• Extra insulation
• Low-flow showerheads and aerator faucets
• LED lighting
• Energy-enhanced power strips
• Bike rooms
• Recycling programs
• High ‘walk score’ (proximity to shopping and public transit)

When?

Depending on the age and efficiency of your existing systems, it may be costlier to keep them running as opposed to replacing them. However, operators should be aware of seasonal concerns, especially when it comes to upgrades requiring construction.

“One of the most important factors is timing,” says Kate Wellington of Energy Trust. “For example, it’s a lot easier for property managers and residents alike if window replacement or HVAC improvements are completed in more moderate weather conditions.”

She also highlights the impact to residents’ health and wellness. Making these upgrades a priority can result in fewer vacancies, turnovers, complaints and maintenance calls.

Where?

Unlike a typical residential home, multifamilies offer many opportunities for energy enhancement. In addition to appliances, fixtures and features of individual apartments, owners may also capitalize on green savings in common areas.

When introducing energy-efficient lighting, windows and HVAC, start with the building’s exterior, then work your way inward for maximum impact. Eco-friendly heating and cooling in the lobby, hallways and other shared spaces keeps tenants comfortable and saves you money in the process. Likewise, integrating LEDs in the parking lot, entranceways, and along outdoor pathways helps slash your bill while infusing lovely ambiance.

Why?

Put simply, green investments provide so many sensational incentives. Owners and managers see swift savings on their utility bills. They also reap the rewards of a happy tenant base. There are also plenty of funding opportunities geared towards multifamily developers.

Federal and state programs provide attractive rebates, tax breaks and cash bonuses depending on the scope, scale and outcome of your energy-efficient project. Don’t forget to do your research, and when in doubt, consult an expert.

Everest says: you simply can’t lose
Go green with confidence