Improving Rents with Green Apartment Units
HD Supply Facilities Maintenance recently commissioned Strata Research to perform a survey to determine whether there is value for property owners in making their apartment units more efficient. Most owners recognize the value of sustainability in common areas where they pay consumption bills; however, in-unit upgrades are often ignored because most renters pay their own electric and water bills. Before the survey was administered, I believed that renters would be willing to pay more for efficient apartment units, but I wasn’t sure exactly why or how much extra they would be willing to spend. Specifically, would renters be interested in spending more on rent for a “green” apartment unit than the savings they received from those efficiencies? What kind of “green” upgrades would renters value the most?
The results of the Green Renter Survey provide compelling insights into what people are looking for in a “green” apartment unit, how much they will pay, who falls in the target market, and what their motivations are in seeking out a “green” apartment community. This survey can then help owners understand the revenue potential and the added value to their property by offering basic and deluxe green units.
I am excited to have the opportunity to present the results of the survey at the end of the month at the National Apartment Association (NAA) Education Conference and Exposition. I have put together a great team to discuss the results of the survey and the value of green apartment units and communities, and to share their personal experiences.
Gretchen Ponts, President of Strata Research, will begin the session by providing an in-depth review of the Green Renter Survey. She will discuss the methodology of the study and go over some of the results, including which features are most important and why “green” matters to those surveyed. She will examine the definition of “basic green” versus “deluxe green” apartments, show renters’ willingness to pay extra the optimal incremental price for green as defined by the survey results, and describe what a typical “green” customer looks like.
Next we will have the pleasure of hearing from Curt Mann, President of Property Operations and Asset Management for Cortland Partners, about how he is putting the results of the Green Renter Survey into practice on his properties. Curt has a long history of being on the cutting edge of green in the multifamily industry and will provide insight about the typical return on investment for green projects, then discuss details about common-area and in-unit upgrades and how Cortland Partners markets and values those upgrades.
Finally, we will hear from Scott Wilkerson, Principal and Chief Operating Officer for Gingko Residential. Scott, the NAA Green Task Force Chair, will share his experience with a major green renovation at Yorktown Club, a recent acquisition for Gingko Residential. Scott and his team evaluated almost every green upgrade opportunity during the renovation and made a strong business case for including many efficiency measures, including ENERGY STAR®-qualified appliances, HVAC, and windows. His team was able to leverage efficiency gains on the property in a way that allows Gingko Residential to charge renters for water and substantially increase rent while only nominally increasing renters’ costs to live in the upgraded units.
Please join us for our presentation, Improving Rents with Green Apartment Units, at the NAA Education Conference & Exposition in Boston, Mass, from 12:45 to 2:15pm Friday, June 29. Hope to see you there!