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Page 26 — Multifamily Properties Quarterly — November 2017
Sustainability
D enver is an attractive city for
multifamily purchasers. Just
one year ago, Pensam Residen-
tial and BH Equities identified
an opportunity for substantial
value creation through the purchase of
the Breakers Resort (today known as
TavaWaters) for nearly $350 million,
among the highest in the United States
for multihousing in 2016.
Beyond plans to modernize and
enhance the property’s amenities, the
investor team recognized the value of
incorporating long-term, water-efficien-
cy planning.Why? Not only to extend
Colorado’s water supply as demands
increase from a growing population,
but also because water conservations
offers the greatest opportunity to affect
the bottom line and exceed the 15
percent savings target most lenders
require.
The Environmental Protection
Agency estimates that 20 percent of all
toilets in the United States are leaking
and that U.S. homes waste more than
1 trillion gallons of water yearly. Apply
these statistics to a property and imag-
ine what kind of savings, in addition to
increased efficiency, can be achieved.
Hefty rebates are made available from
utilities and financiers for implement-
ing water-efficiency programs, and it
appeals to today’s modern residents
who want to use water efficiently.
Here’s a look at how our project was
able to implement water conservation
efforts, secure financing support from
Freddie Mac and land the largest toilet
rebate in DenverWater’s history.
• Partneringwith Denver Water.
According to the Downtown Denver
Partnership, the population in the
downtown Denver core has tripled
since 2000, and
with added popula-
tion comes more
demand for water.
DenverWater, the
city’s oldest and
largest water utility,
offers conservation
rebates to help prop-
erty owners finance
the implementation
of water-efficiency
programs. As a
result, property own-
ers land rebates that
make the investment worthwhile for
the ownership team as well as for rent-
ers.
The ownership team focused on
DenverWater’s toilet rebates, which
is offered to homeowners and com-
mercial property owners.The utility
has given toilet rebates to more than
251,000 customers since 2009.The
requirement – installing toilets that use
1.1 gallons of water per flush for $150
per toilet rebate. DenverWater reserves
the right to inspect all installations. By
partnering with a company like Eco-
Systems that specializes in securing
water conservation rebates, applicants
can experience a smooth process.
• Additional financing support – Fred-
dieMac. On top of utility rebates from
DenverWater, property owners who
are refinancing or purchasing new
property can take advantage of Fred-
die Mac rebates.The process is similar
for most programs, including eligibility
requirements (conventional apart-
ments, targeted affordable and senior
housing) and the borrower commit-
ment to install capital improvements
that will achieve a minimum 15 per-
cent reduction in
the whole property’s
annual water and
energy use.
Freddie Mac
requires a minimum
green improvement
budget of $350 per
unit, commence-
ment of work
within 180 days and
installation within
two years. Once
our project was
deemed eligible for
a rebate, an energy
audit report was conducted to qualify
for the Freddie Mac Green Advantage
program. Property owners can receive
a $3,500 credit for an energy and water
audit, which identifies opportunities
for reducing utility costs.Typically, the
more rigorous the energy audit, the
better the financing terms.
• Implementation. Once approved for
the rebates, Pensam Residential and BH
Equities knew they needed an expe-
rienced partner to execute the retrofit
– one who is experienced in green-
financing projects with lenders like
Freddie Mac, who understands Denver
Water utility requirements and who
could seamlessly make it all happen in
a matter of weeks.
Having worked with EcoSystems, an
established water conservation com-
pany, on previous multifamily projects
inTexas, Florida and Illinois, the owner-
ship team brought them on board. Eco-
Systems’WaterWise program is specifi-
cally designed to maximize the impact
of federal apartment rebate incentives.
It includes affordable solutions such as
high-efficiency toilet, shower and sink
replacements that achieve savings that
often exceed the 15 percent target and
require minimal implementation time.
As a result, residents experience very
little interruption.
The company helped the project con-
serve even more water than the Denver
Water utility required.The definition
of an EPA efficient toilet continues to
change – the majority of the toilets
they installed were 0.8 gallons (down
from the 1.1 gallon requirement) and
flapperless, eliminating the No. 1 cause
of toilet leaks and saving both up front
and long term.
Highlights of the retrofit include:
•Between January and April, EcoSys-
tems replaced 2,507 toilets with ultra-
high efficiency models in partnership
with DenverWater.They replaced 2,507
showerheads and 2,507 bathroom sink
faucet aerators with more water-effi-
cient models.
•The EcoSystems team installed
water-efficient kitchen faucet aerators
and fixed leaks they found in pipes
across the apartment community.
•Replaced roughly 7,500 fixtures in
about three months.
• TavaWaters today. The water-
efficiency renovations are projected to
help the apartment community save
an estimated 35 percent on its annual
water bill and, even better, Denver
Water estimates the project will save
around 33 million gallons of water each
year. New showerheads use 1.5 gallons
per minute, a full gallon less per min-
ute than the old models. Sink aerators
reduced water flow from 2 gallons per
minute to 1.
Before the changes, the residents
How we secured utility's largest toilet rebate
Richard
Lamondin
CEO, EcoSystems,
Miami
Eddie Reiner, CFA
Director, asset
management,
Pensam
Residential, Miami