The Dinerstein Companies
Help investors reduce operating expenses, increase occupancy and reduce turnover with a sustainable approach.
If you could tell your investors that you know a way to reduce operating expenses, lease up faster, reduce turnover, and at the same time help the environment do you think they would be interested? The overwhelming answer for us has been yes and going green is the way to achieve it!. Our approach over the past two years as a leader in the student housing industry has been to “Go Green” from top to bottom. Changing the way we look at student housing was necessary because we knew that we couldn’t afford to do things the old way in these tough economic times. We have figured out, for us that a premium of 1% or less is the cost of going Green. This small premium is well worth it from what we have already seen. Here is what we have learned.
Reduced Operating Expenses
Who isn’t interested in cutting their expenses to improve their bottom line? Going “green” translates into saving green. By using integrated building design, building modeling, and evaluating the cost and efficiency of energy systems, you are ultimately determining how much money you will save during the lifecycle of your building. By investing in green features that have proven savings make sense such as lighting, windows, appliances, HVAC systems, water fixtures, and landscaping you could reap a payback on these upgraded systems in less than 5 years. For a small premium in construction cost you can more than pay for them on the operations side. Payback can be achieved even faster if you apply for rebates and incentives distributed through the local utility companies. We are anticipating savings of close to 25-30 % on utility costs for our green properties. These savings are huge, especially in an “All Bills Paid” market.
Lease up Faster
With all the units currently on the market, green student housing is another way to differentiate yourself from competitors. I was told recently by a green property owner that they have leased up faster and have given a month’s rent less in concessions than their competitors that aren’t green. He feels that this alone will more than pay for their premium of going green. He has contributed their success to the fact that they are green and certified under the LEED for Homes by the U.S. Green Building Council. Our properties have had great success at leasing up also. Both our Sterling Collwood and Central properties are seeking LEED Certification and have more traffic than our competitors. We are currently on pace to be 100% occupied by Fall of 2010 when we open which isn’t easy in today’s economic climate. Our approach is to educate our prospects on the benefits of green housing which are better indoor air quality, utility bills savings, recycling, convenience, and quality of construction. These things resonate with students and help us stay a step ahead of competition. Going green gives our leasing staff another tool to help close leases.
By being the only green student property in our markets, we have a great advantage at getting our tenants to renew. The one thing that has been consistent in my visits to campuses across the country is the fact that students are concerned about climate change and the environment. Students have become a lot more selective about what products and services they choose in respect to sustainability. They understand the economic, social, and environmental value. Because we make it easy for them to recycle, save energy, bicycle to class, and walk to local services they will hopefully choose us over a competitor that don’t offer these things. So we have an edge at renewal time. A great example of this is at our Sterling Central project at The University of Central Florida. We haven’t opened yet and residents are already inquiring about renewing their lease. This is a great example of how going green continues to pay.
Doing Our Part
The last and most important thing is what we can do as investors, developers, builders, and managers of student housing to reduce our impact on the environment. We are on the right path with high density development, which is a sustainable practice. But we can do better as an industry. Student Housing is one of the largest producers of household waste and one of the largest consumers of energy. Just imagine if each and every student housing project in the nation recycled and improved its energy efficiency of their buildings by just 1 %. By changing the way we do business, we can have a large and significant impact on the environment. We all can raise the bar and challenge each other to develop more sustainable housing.
Going green does not mean you have to be LEED Certified, Energy Star, or participating in one of the many “green” certification programs. Green is what it means to you as a company. What you do to improve your properties performance to reduce energy and water usage, to improve air quality for residents, and to reduce the impact your building and residents will have on the environment. You don’t have to accomplish this by adding a wind turbine or solar panels either. Start with simple improvements such as energy efficient lighting, adding a recycling program or using low VOC paints. These additions are relativity small but can have a significant impact to the environment and your bottom line. That has been our approach and we have had positive results. So learn from our experience, going green is worth it.