CREJ - Multifamily Properties Quarterly - October 2015
As the housing market revitalizes in Denver and around the country, green initiatives are more readily recognized and celebrated. The U.S. Green Building Council suggests that in the next three years, residential green construction spending will nearly double. Although some would assume this growth is isolated to single-family residential projects because of the increased initial investment and longer return schedule for multifamily properties, a SmartMarket Report by McGraw Hill Construction projects 79 percent of multifamily properties will be built using green initiatives by the year 2018. That’s a 25 percent increase from the 54 percent reported in 2014. We’ve seen this significant growth in green-building initiatives for multifamily properties firsthand. We were honored with the opportunity to work with some of Denver’s most forward-thinking developers to bring sustainable design to multifamily properties across the Denver metropolitan area. For example, AMLI Residential has built a brand on using sustainable design practices in its multifamily properties and consistently pursuing LEED certification. “Pursuing LEED certification at all new AMLI projects is a central tenet of our company culture and development thesis,” said Andrew Mutz, senior vice president of development. “We believe it provides for a healthier living environment for our employees and residents and, quite simply, is the right thing to do.” AMLI’s most recent LEED certification came in partnership with Norris Design at AMLI Riverfront Park, which achieved LEED Gold. This continued distinguished effort is a great success and “has helped the communities we develop outperform expectations while reducing the carbon footprint of both AMLI and all the residents living at our properties,” said Mutz. The largest barrier to more green initiatives in multifamily communities is the initial, higher development cost due to specialized materials. This hasn’t stopped all local developers, however. “Even though the first costs are significantly higher, the benefits obtained in tenant retention and overall occupancy affordability help to offset those costs,” said David Pretzler, president at C&A Cos. “Building sustainable communities helps us maintain a healthy bottom line through higher occupancy and rent levels in declining markets because a large part of our affordability in comparison to our competitors is obtained through lower heating, cooling and water bills for our residents,” said Pretzler. The trade-off Pretzler suggests between higher initial costs and increased tenant retention due to competitive utility costs is a major motivator for conscientious developers to uphold sustainable design practices in their builds. C&A Cos. and Norris Design completed the Solaire development in Brighton, which is the largest geothermal installation at a multifamily community in the nation. After the development’s success in reducing its carbon footprint and the utility obligation of its residents, C&A Cos. is continuing this effort in more of its upcoming properties. Aside from the potential, long-term financial benefit, many developers, architects, engineers and construction professionals are recognizing and finding the use of sustainable design practices offers a sincere fulfillment of innate moral obligations to protect precious resources. The Grove-Stapleton is one of those realizations. This property, developed by Zocalo Community Development, features a rain garden that filters water from building runoff before it’s deposited into the storm water system. Small steps such as this can make a larger difference over time, even on a personal level for the residents of these communities. “Based on Zocalo’s surveys of residents, sustainability can, if done well, create a level of differentiation more powerful than location or even price,” said David Zucker, principal at Zocalo. “The broad concept of sustainability or, more basically, ‘conservation,’ means different things to different people based on powerful self-descriptors like politics and environmental interests,” he said. “Therefore, if we properly convey it, sustainability becomes a means to empower self-actualization.” In this way, Zocalo views sustainable design practice and “LEED certification as tactics, not goals – these are ways to ensure that the foundation of this self-actualization is rooted in third-party review,” he said. Ultimately, the process of incorporating sustainability into multifamily properties isn’t, nor will it ever be, concerned majorly with profit, but rather the building of communities that matter. These communities directly benefit all stakeholders. Developers benefit from greater tenant retention and long-term, increased profit. Tenants benefit from a greater sense of self and preservation as well as lowered utility obligations. And, most importantly, our communities benefit because we leave a substantially smaller carbon footprint as we continue to discover how to build truly sustainable communities. Using sustainable design practices “is only one of the tactics that support the goal of making belonging to a sustainable community matter,” said Zucker.