CANADA’S NATIONAL PUBLICATION FOR APARTMENT OWNERS AND MANAGERS
VOLUME 12 / NUMBER 1 / MARCH/APRIL 201 5
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The Energy Issue: body copy
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FOREVER
GREEN Cheryl Gray Helps Lead Bentall Kennedy’s Sustainability Efforts
Strategies for engaging tenants PA R T O F T H E
Renovating aging assets The rise of modular apartment design
P A R T
O F
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Editor’s Note
Energy efficiency is the new normal
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As the industry changes, green technology is no longer seen as something desirable but out-of-reach for most property owners. Energy-efficient features and appliances are now the expectation; the minimum acceptable standard for buildings of all ages and sizes, embraced by renters and cost-conscious property managers alike. At the very least, older properties are being retrofitted with LED lights and low-flow toilets. Sub-metering has become mainstream and green roofs are sprouting up all over the place. In our interview with Cheryl Gray, senior vice president, residential, with Bentall Kennedy, Cheryl reflects on the evolution of the green movement, which began roughly a decade ago. Since then, the company’s energy reduction efforts have been hugely successful—thanks to initiatives like “Forever Green” and the EcoTracker, which you can read all about beginning on page 22. In apartment construction, modular designs are being touted for their time- and cost-saving ways. On page 28, Derek Lobo walks us through the construction fad that is taking cities like Regina and Seattle by storm. Modular designs aren’t what they used to be, and we have some photos to prove it. If factory-made units can shave months off allotted construction time, you can bet more developers will be choosing to go this route. Of course, one of the key objectives with any sustainability initiative is engaging tenants and employees in daily responsible practices. In our Ask the Expert section, Randy Daiter of M&R Holdings shares a few strategies to help ensure your programs achieve the attention and commitment they deserve. Enjoy the issue, and please stay in touch. Follow us on our many social media channels. I’d love to hear from you.
Erin Ruddy @ehruddy
Editor
Erin Ruddy
Associate Publisher
Mitchell Saltzman
Senior Designer
Annette Carlucci
Designer
Jennifer Carter
Production Manager
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Contributing Writers
aula Gasparro, Derek Lobo, P Jessica Green, Croydon Richmond, Chaim Rivlin, Andy Schwartze, and Chris Seepe
National Sales
Michelle Lumb Sean Foley Stephanie Philbin Mitchell Saltzman
Circulation
Gill Daniels For sales information call (416) 512-8186 ext. 248
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President Kevin Brown Group Publisher Melissa Valentini Copyright 2015 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 1712-140X Circulation ext. 232 Subscription Rates: Canada: 1 year, $50*, 2 years, $90*, US $75 International $100, Single Copy Sales: Canada: $12* * Plus applicable taxes Requests for permission to reprint any portion of this magazine should be sent to Melissa Valentini Authors: Canadian Apartment Magazine accepts unsolicited query letters and article suggestions. Manufacturers: Those wishing to have their products reviewed should contact the publisher or send information to the attention of the editor. The opinions expressed are those of the authors of articles and do not necessarily reflect the views of Canadian Apartment Magazine. This information is general and is not a substitute for legal advice. Sworn Statement of Circulation: Available from the publisher upon written request. Although Canadian Apartment Magazine makes every effort to ensure the accuracy of the information published, we cannot be held liable for any errors or omissions, however caused. Printed in Canada.
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CONTENTS COVER STORY 26 Industry Influencer
Cheryl Gray discusses the evolution of Bentall Kennedy’s green movement By Erin Ruddy
FEATURES 18
How to Achieve Energy Efficiency By Mihae Ann
20 Low Cap Rate Purchase Could Mean Future Trouble By Chris Seepe
COLUMNS 12
Transactions First Quarter Market Report By Richard Vilner
14
CMHC Retrofits Done Right By Paula Gasparro
27
Newsworthy Leading the Way to a Sustainable Future By Croydon Richmond
28 Portfolio Modular Apartments Offer Modern Solutions By Derek Lobo 30 Management Communicating Your Green Initiatives By Jessica Green 32
Insurance When Accidents Happen By Andy Schwartze
44 Marketing Everyday Ways to Save By Chaim Rivlin
DEPARTMENTS
Innovative thinking. Practical results.
Structural Restoration Structural Engineering Building Science Parking Facility Design
4
Editor’s Note
48
Ask the Expert
50
Smart Ideas
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THIS MONTH’S ONLINE EXCLUSIVES ALL THE BUZZ
New apartment construction surges in Canada Balliol Park, located on Davisville Road between Yonge Street and Mt Pleasant, is just one of Toronto’s 21 new purpose-built apartments currently under construction. Developed by Shiplake Properties Limited and designed by the Diamond Schmitt Architects, when complete in 2016...
Airport cities among workplace trends for 2015.
FROM THE GREEN BIN
Cultivating wellbeing in the built environment Mental health, including depression, is the leading cause of short-term disability in the global workplace. In Canada, 50 per cent of short-term disability claims are mental health-related and represent 70 per cent of costs.
Build a business continuity plan in seven steps With the increase in climate change impacts, such as flooding and power outages, no one wants to be “closed,” losing clients, reputation and revenue. Many organizations understand that it’s important to be prepared for unforeseen business disruptions, yet are unsure how to develop a plan that will carry them through until normal operations are fully restored.
National Solid Waste Benchmarking Study reveals immediate need for industry-wide improvement.
EXPERT ADVICE
Landlord lawyer, J. Awgu, explains how to avoid predatory tenants.
CONNECT WITH US ON:
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No flat lines. Just healthy bottom lines. MetCap Living knows the importance of your property investment. With over 25 years experience in professional property management, we have the expertise to boost your NOI. Ask us how we have done it for others in our $2 Billion property portfolio. From Marketing, Leasing, Accounting, Utilities and Site Management, we tailor our services to your needs, while providing your residents with great living experiences in friendly neighbourhoods. Ensure the health of your bottom line, contact: K(kazi) M Shahnewaz Director, Business Development 647.887.5676 • k.m.shahnewaz@metcap.com
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Transactions
GTA Multi Residential Market Summary
By Richard Vilner
RealNet Canada Inc. announced results for the GTA commercial real estate investment market for the first quarter of 2015. A total of 484 transactions above $1 million were recorded, totaling $2.7 billion for the Greater Toronto Area, representing a dollar volume decline of 24 percent versus the previous quarter and a decline of 37 percent compared to the same period in 2014. RealNet Canada Inc. announced results for the GTA commercial real estate investment market for the first quarter of 2015. A total of 484 transactions above $1 million were recorded, totaling $2.7 billion for the Greater Toronto Area, representing a dollar volume decline of 24 percent versus the previous quarter and a decline of 37 percent compared to the same period in 2014. Residential land, industrial and retail property sectors lead all activity in the opening three months, combining for $1.6 billion in transactions, or 59 percent of the overall market in terms of dollar volume. Compared to the same period a year ago, residential land and industrial sectors recorded gains of 24 percent and 2 percent respectively, while the retail sector declined by 61 percent.
The apartment sector contributed $328 million, or 12 percent, to the overall first quarter dollar volume with a total of 37 properties trading in excess of $1 million. On a dollar volume basis, this represents a decrease of 7 percent against the previous quarter and an increase of 64 percent from the same period in 2014, which totaled only $200 million (33 transactions). In the opening quarter, a total of seven apartment transactions closed in excess of $10 million contributing $242,135,300, or 74 percent to the overall sector total. The following seven large apartment deals averaged $167,585 per unit and had an average yield of 4.25 percent:
Top 7 GTA Apartment Transactions Q1 2015 Transaction Date
Transaction Name
Municipality
Price
12/01/201
50 Spadina Road & 35 Walmer Road
Toronto
$59,000,000
229
05/02/2015
111 Carlton Street
Toronto
$50,540,000
680
18/02/2015
2175-2181 Avenue Road, 53 Delhi Avenue, 166 Wilson Avenue
North York
$47,000,000
260
31/03/2015
1440-1460 Tyandaga Park Drive
Burlington
$30,736,000
175
31/03/2015
3055 Glencrest Road
Burlington
$23,000,000
110
29/01/2015
1955 Valley Farm Road
Pickering
$21,859,300
233
04/02/2015
5693 Highway No. 7
Markham
$10,000,000
55
10 www.canadianapartmentmagazine.ca
# of Units
New & Notable Transaction
2015 Q1 Quarterly Breakdown
This chart summarizes, on a quarterly basis, the total dollar volume and the total number of apartment transactions greater than one million in the GTA region. Q1-2015 reached $328 million, with a total of 37 multiresidential properties trading above $1 million.
2015 Q1 Transactions Bubble Chart
This chart summarizes the first quarter apartment transactions greater than $1 million in the Greater Toronto Area geographically and by dollar volume (the larger the transaction is in dollar volume, the larger the size of the circumference).
2040 Mount Forest Drive Located north of North Service Road and east of Brant Street in Burlington, Ontario, 2040 Mount Forest Drive is improved with a six-storey apartment building containing a total of 36 units. The building was purchased for a total consideration of $5,150,000, representing a price per unit of $143,056. Date of Sale: March 2, 2015 Sale Price: $5,150,000 Capitalization Rate: 4.2% Total # of Units: 36 Price per Unit: $143,056 Brokers: Stonebank Real Estate Ltd. For the month of March, 2015, there were a total of fourteen apartment transactions that sold above $1 million throughout the Greater Toronto Area. The overall dollar volume for these transactions totaled $97,335,800. The average price per unit was $172,370, and the average capitalization rate was 4.39 percent.
This article was written by Richard Vilner, Research Manager at RealNet Canada Inc. Contact Richard at: rvilner@realnet. ca. RealNet Canada Inc. is the leading real estate information services company in Canada, powering the decisions of firms involved in approximately 75% of the market activity. www. realnet.ca March/April 2015 11
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CMHC
Retrofits Done Right
Renewing Aging Assets with Energy Savings in Mind By Paula Gasparro
Many owners dread the expense of renovating their aging properties. But the reality is, by thoughtfully incorporating energyefficient materials and upgrades, retrofits are a great way to save on future costs. Here is a case study deomonstrating how this can be done. Built in 1985, a 29-storey, multi-unit high-rise had annual water and energy costs of over half a million dollars. The building was heated and cooled by electricity, with baseboards and fan coil cooling systems in the individual 191 suites. The in-suite controls were simple and inefficient, and because there were separate thermostats for each system, both cooling and heating systems 14 www.canadianapartmentmagazine.ca
could be operating simultaneously. Contributing to the electricity and water consumption load, there were individual electrically heated domestic hot water tanks within each suite as well as two bathrooms, each with a 20-L backflush toilet. In addition, the existing inefficient atmospheric boilers for the corridor make-up air system had reached the end of their useful life.
CMHC
The building’s owners manage a number of high-rises and have had previous success renewing aging assets in a way that generates energy and water savings with a favourable return on investment. They knew that with the planned retrofits, an annual savings of nearly 12 percent and an average return on investment of 8.5 years would be generated. Retrofits involved installing a new heating plant, which represented 27 percent of the capital investment; replacing the individual hot water tanks with a central hot water plant (26 percent); upgrading the in-suite controls (20 percent); replacing the toilets and showerheads (19 percent); and lighting retrofits (7 percent). Due to rising electricity costs, finding an alternate source of heating to the existing baseboards was a priority, as was upgrading the in-suite controls. The solution was a new hydronic heating plant, which was comprised of two 700 MBH, 85 percent efficient copper fin tube boilers, and one 1,000 MBH, 94 percent condensing boiler. Pumping systems, used for the fan coil cooling system in the suites, were integrated into the design to minimize capital costs. As well, a glycol heat exchanger was added to heat the corridor make-up air and the site’s building automation system was enhanced to provide control for the new heating plant.
domestic hot water plant was installed, the individual tanks were removed. The new plant has three high-efficiency, condensing boilers and is also controlled by the building automation system to maximize savings and provide a safe and reliable source of hot water for the suites. Four 910-L (200 U.K. gal.) storage tanks
were installed to ensure that capacity was not an issue. Somewhat unique to the building, rearexit toilets were used throughout. As a result, the toilets were more expensive for water consumption than the standard bottomexit toilets. With the retrofit, the original 20-L toilets and standard showerheads were
The retrofits The existing in-suite electric baseboard heaters remain available to supplement the hydronic heating system during very cold or high wind-chill days. Replacing the existing thermostats, new energy-efficient in-suite controls can be manually adjusted by tenants but can also be remotely controlled. This is because the new controls are networked and connected to the existing penthouse automation system. For maximum savings, ultrasonic motion sensors have been installed to identify a suite’s occupancy. When no motion is detected for a predetermined time (initially set at 60 minutes), the suite temperature set point is adjusted up or down (summer or winter) by 2.5° Celsius. Individual electrically heated hot water tanks originally provided domestic hot water to each suite. Located in the suite’s utility room, the tanks were expensive to operate and were starting to fail. After a new centralized March/April 2015 15
CMHC
replaced with 6-L ultra-low-flow toilets and 7.5-L per minute showerheads. Each suite had two bathrooms, which helped to minimize disruption to the tenants. The first washroom was retrofitted and operational before the second washroom was converted.
The final changes were to the stairwell lights, replacing the T-12 strip with T-8 technology, in conjunction with electronic ballasts. Motion sensors were also installed at each landing to control the stairwell lighting. Redundant relays and sensors were also installed to ensure
Are you contemplating the sale of your apartment property? Consider the following: • Who will represent your best interests? • Who will give your property maximum exposure? • Who will deliver the highest value for your property? With over 20 years experience, tens of thousands of units sold, and hundreds of clients represented, we have consistently delivered superior results. Through our local and national coverage, we create maximum exposure, ensuring maximum value for your property. Please visit our website at www.cbre.ca/nag-toronto or contact us at 416.815.2332 to learn more about how we can help you.
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Calgary
Edmonton
Winnipeg
London
Kitchener
that any individual component failure would not compromise the operation of the system. Common area lighting such as mechanical rooms were also retrofitted with either T-8 or compact fluorescent technology. The main installation challenge involved the mechanical rooms, which had limited floor space for the new heating and hot water systems. This was overcome by making modifications to existing piping and creativity when it came to appropriately venting the boilers. For the hot water, normally a single large tank is used in central systems, but the single tank could not be accommodated in the mechanical penthouse because of low headroom. The solution was to use multiple small tanks that could fit between other mechanical equipment. Since the building was fully occupied at the time of the retrofits, coordination was also needed to ensure that disruption to the residents was kept to a minimum during the retrofit work. The water retrofit has demonstrated excellent savings and customer satisfaction, and the owners expect similar success with the other retrofits, anticipating annual savings of nearly 12 per cent with an average payback period of 8.5 years. Of the five retrofit areas, the return on investment was shortest for the water measures (5.7 years) and the domestic hot water plant (6.4 years), while the longest return on investment was for the in-suite controls (13.7 years). Payback for the new heating system and the lighting retrofits was expected to be 9.8 and 9.5 years, respectively.
Toronto
Ottawa
Montreal
Saint John
Halifax
For close to 70 years, Canada Mortgage and Housing Corporation (CMHC) has been Canada’s national housing authority, and a source of objective, reliable housing information. To take advantage of CMHC’s Mortgage Loan Insurance or to learn more about CMHC research, contact Paula Gasparro, Manager, Business Development, Multi-Unit Mortgage Insurance at 416-250-2731, via e-mail at pgasparr@cmhc.ca or visit us at www.cmhc.ca.
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Feature
How to Achieve Energy Efficiency in MultiResidential Properties Bringing your building up to 2015 standards By Mihae Ann
Achieving energy efficiency in multi-residential properties is the new normal. With the cost of utilities rising, owners are constantly endeavoring to reduce their net operating costs while finding new and creative ways to market their buildings. Energy efficiency in multi-residential properties can be achieved through various measures. The most common measures include: • submetering • lighting retrofits • implementing a tighter control on energy consumption • replacing old, inefficient appliances • using renewable, natural sources (many provincial incentive programs are available to offset the costs) • comprehensive utility expense management
Popular methods for achieving energy efficiency: 1. Submetering Submetering makes residents financially responsible for their personal utility use. Realizing the financial implications of their personal consumption incents individuals to reduce their in-suite consumption. For example, according to an analysis of 1,200 suites in 15 Toronto buildings, in-suite electricity consumption drops by up to 48 percent when a building is submetered. 18 www.canadianapartmentmagazine.ca
Top reasons to achieve energy efficiency: 1. Electricity prices are on the rise For the last five years, electricity prices have, on average, increased by 9.3 percent annually in Ontario. They will continue to increase over the next 20 years, according to Ontario’s Long Term Energy Plan. 2. It’s an effective way to reduce operating costs Energy efficient retrofits can vastly reduce the building’s net operating costs, which means an increase in the building’s net operating income. 3. Tenants today are seeking green buildings Making the building more energy efficient has marketing benefits. As Canadians are becoming more interested in sustainability and sustainable living, a greener building is and will be a much more attractive place to live in than a non-green building.
2. Lighting retrofits Changing to LED lights throughout a building is a great way to reduce energy consumption as they use up to 75 percent less energy than standard incandescent lighting. They also last 25 times longer.
Feature 3. Take a tighter control on energy consumption a) Adding motion sensors in a building’s garages and hallways can reduce energy consumption by up to 25 percent. b) Occupancy thermal based sensing for heating, ventilation, and air-conditioning (HVAC) is an efficient way to reduce energy consumption up to 25 percent without compromising tenant comfort. c) For electrically heated buildings, wireless thermostat control systems can save energy and costs on heating while improving tenant comfort. 4. Replace old inefficient appliances a) Old, inefficient fridges and air conditioners use on average 15 percent more energy than newer appliances. b) While a conventional showerhead uses up to 27 litres per minute, a low-flow model uses 9 to 11 litres per minute. Hot water can account up to 25 percent of a household’s total energy costs. 5. Take advantage of renewable, natural sources a) Green walls – or living walls – help reduce a building’s energy consumption in both hot and cold weather. In the summer time, the surface of a green wall is up to 10°C cooler than a non-green wall. During winter, the green wall provides an additional layer of air, which means extra insulation.
b) Installing rooftop solar photovoltaic (PV) systems is another option to consider as Ontario’s Feed-in Tariff (FIT) program guarantees a building owner a fixed payment for a 20-year contract period while the generated solar power feeds into the grid system. After the 20year contract is expired, the PV systems can stay on the roof and generate energy for the building. 6. Comprehensive utility expense management Comprehensive utility expense management, which includes auditing and benchmarking, is another effective tool available for owners and managers. a) Energy benchmarking enables strategic building audits and infrastructure upgrades. b) Bill and rate auditing helps reduce unnecessary expenses as it’s not uncommon for expert bill auditors to find savings on utility bulk bills. These allow owners and managers to choose the right methods and prioritize upgrades while reducing operating costs.
Mihae Ahn is the marketing manager, multi-residential and commercial of Wyse Meter Solutions. She holds a Master’s degree in Environmental Studies. Wyse provides turnkey submetering and utility expense management services to property managers, building owners, and developers across Canada. 905-887-9893 | allprofessionaltrades.com
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Finance Feature
Low Cap Rate Purchase Could Mean Future Trouble Smaller Investors Should be Aware of the Risks By Chris Seepe
Real estate investors must be very careful about purchasing an investment property under a five percent cap rate—the rate at which many retail plazas and multifamily properties are currently trading, with a down payment of 25 percent or less.
Companies with deep pockets understand the consequences of low cap rate purchases and can afford to look to a long term return on investment. Smaller investors, anxious to purchase a property without proper financial due diligence, could discover that a small decrease in their net operating income, or a small increase in interest rate or cap rate, could lead to a substantial drop in property value and return on investment. Assume a rental property generates $100,000 per year in income. With 20 www.canadianapartmentmagazine.ca
expenses—especially utilities and taxes rising at an alarming rate, combined with the severe legislated restrictions on rent increases and the inability to pass on legitimate operating expenses—the cost of operation for smaller investors could be 45 to 50 percent of income. Conservatively assuming 50 percent expenses, this leaves $50,000 before financing, which is called net operating income (NOI). If you own the property outright with no mortgage, then this is perhaps okay, although it also means your equity is “dead money,” meaning your
equity is not working for you to fuel financial growth. In simple terms, the cap rate establishes a “baseline” property value, by dividing the cap rate into the NOI. ($50,000 NOI / 5 percent cap rate = $1,000,000 property value.) If expenses (not interest rate) rose five percent in one year and rent guidelines allowed a 1.6 percent increase, you’d have an overall decrease in NOI of 3.4 percent. NOI would then be $1,700 less than the year prior. The same 5.0 cap rate computes a property value of $966,000. The $1,700 decrease in NOI caused a $34,000 loss in property value—every $1 of decrease caused $20 of lost property value. Financing costs come out of NOI. If you pay a 25 percent down payment, the $1,000,000 property used in our example would have a $750,000 mortgage (75 percent loan-to-value or LTV). Assume interest is 3.0 percent, fixed, fiveyear closed, 25-year amortization. Monthly principal and interest would be $3,550 per month, or $42,600 per year. Subtracting this financing from the NOI of $50,000 leaves $7,400. This is the money that goes into your pocket, called cash flow before taxes or profit, before paying for major capital costs (e.g. a new roof or furnace). Now, let’s assume all factors above remain the same, but your mortgage comes due and rates have increased to 5.0 percent. The monthly mortgage payment is now $4,360
Finance Feature per month—or $52,340 per year. You’re now paying $2,340 per year more than you’re making, again, before capital costs. In real life, you would have paid down some of the mortgage principal. Income would perhaps have increased but so too would expenses and/or vacancy rates might have risen. There are many factors to consider but the point is that the 2.0 percent increase in interest put your property into a near break even or possibly even a negative cash flow situation. The first major capital expense—say, a new roof— would make your investment a significant losing proposition. If you had accepted a 4.5 percent cap on a NOI of $50,000 for the property above, you’d have purchased the property for $1,111,100. Your 75 percent mortgage would be $833,325 with monthly payments of $3,944, or $47,324 annually. Your precapital cost “profit” dropped from $7,400 to $2,676. If the interest rate rose 2.0 per cent, monthly payments are $4,847 or $58,160/year. You’re paying $8,160 out of your own pocket. Your property’s income is not covering the operating and financial costs of your investment. What happens if you have to sell in a buyer’s market in a few years? Loosely speaking, cap rate is partially a measure of return on investment (ROI). You may be satisfied today with a 4.5 percent ROI if 10-year government bonds are less than two percent. But if government bonds rose to four percent, prospective buyers, who take on more risk and workload than a bond buyer, would demand a higher ROI or cap rate. Let’s say buyers demand a six percent cap for the above property that you purchased for $1,111,000, which still generates $50,000 NOI. $50,000 NOI / 6% = $833,334. Theoretically, nothing has changed about the condition, income, expense or any other aspect of your property but the investment climate demanding a 1.5 percent increase in ROI has effectively wiped out $278,000 or 25% property value and 100% of your equity. You have to pay off the $833,325 mortgage, leaving you nothing. Imagine buying multiple properties with only 10 percent down, as some real estate sages have espoused in their get-rich-quick schemes, and then experiencing the above scenarios. It’s
the proverbial house of cards that’ll come crashing down around you. These scenarios are deliberately over-stated but the math and risks are real. Interest rates are the lowest they’ve been in living memory with cap rates following suit. Both will rise sooner or later and your property income should be able to absorb these swings.
Chris Seepe is a commercial real estate broker and broker of record at Aztech Realty in Toronto, specializing in income-generating and multi-residential investment properties, retail plazas, science and technology related specialty uses and tenant mandates. (416) 525-1558 Email cseepe@aztechrealty.com; website: www.aztechrealty.com.
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Industry Influencer
SEEING GREEN IN 2015 By Erin Ruddy
Cheryl Gray, Senior Vice President, Residential, Helps Lead Bentall Kennedy’s Energy Reduction Efforts as the Company Emerges as a Global Leader in Responsible Environmental Practices
22 www.canadianapartmentmagazine.ca
Industry Influencer
December/January March/April 2015 23
Industry Influencer What does it take to be successful in the property management industry today? For starters, it takes more than it did two decades ago, back when pagers and fax machines were the profession’s high-tech tools of choice. Nowadays, successful property management professionals are tech-savvy on a multitude of fronts. They’re also number-crunchers, problemsolvers and bench-markers, tasked with protecting the interests of building owners, residents, communities—and lately, the greater good of the planet. As our issue’s Industry Influencer, Cheryl Gray is the embodiment of all these attributes and more. A hands-on contributor, she’s someone who can be counted on to oversee the minutest details of daily operations. A trusted visionary, she’s always got a well-honed eye on the future. Cheryl’s tenure with Bentall Kennedy began in the year 2000 when she was hired as vice president of the eastern region, overseeing the company’s growing office and industrial portfolio. She went on to lead Bentall Kennedy’s Strategic Resources Group, then switched sectors completely in 2012, helping bring Bentall Kennedy’s residential brand to market. Today the company boasts over 3,900 rental units and 22 multi-family properties from Ontario to British Columbia. Among her peers Cheryl is a respected industry leader. She is currently Senior Vice President of the Executive Committee of the Institute of Real Estate Management (IREM) and previously served as the National Secretary Treasurer of the Building Owners and Managers Association of Canada (BOMA). Recently, Cheryl was honoured as the 2014 National Real Estate Management Member of the Year with REIC, and in 2012 she was recognized by IREM as part of their “Women Changing the World of Real Estate Management” initiative. Professional accolades aside, Cheryl has been at the forefront of the green movement since it first sprouted about a decade ago, and has been integral to Bentall Kennedy’s achievements in sustainability ever since. This being our annual “Energy Issue,” it made perfect sense to feature Cheryl as our respected Industry Influencer. 24 www.canadianapartmentmagazine.ca
Bentall Kennedy’s notable green achievements: • Named Global Sector Leader by the Global Real Estate Sustainability Benchmark (GRESB) • Energy Star Sustained Excellence winner 2011-2014 • $15.1 billion in LEED and BOMA BESt certified assets • 93% of employees surveyed deemed Bentall Kennedy a socially and environmentally responsible organization, highly correlated with employee engagement and retention
How did you get started in the property management industry? Like many, I really just fell into it. It all began in the early eighties in Calgary, where, much like today, you either worked in oil or you worked in real estate. I was working on the development side, but when the bottom fell out of the market, the only division left standing in our company was the property management team. I was approached by the general manager to head up the ten new multi family rental buildings that were coming on stream. I did that for a couple of years, but it was a tough economy. My husband and I decided to relocate to Toronto, and from there it was just a progression of jobs. I was a property manager, then I switched to the commercial side, was promoted to director, and so on, leading to where I am today with Bentall Kennedy. What do you love most about your job? I love that it’s never the same day twice. No matter what happens in the world—whether it’s SARS or blackouts or ice storms—we’re impacted. All the buildings that people use daily for living, working or shopping—they are all managed, and consequently, we, as property managers, have to manage through those challenges and come out standing on the other side. It’s always interesting and dynamic. It’s a bit of an adrenaline rush as you never know what’s coming. What do you consider the most challenging aspect of your work? Being in property management is like running your own business. A lot of people think it’s just about ensuring a building is clean, but there’s so much more to it than that. You have customers within the buildings you manage. You have clients who own those buildings
and who you need to report to. You have suppliers, service providers, financial responsibility and a staffing component to manage. A property manager really has to be able to deal with all those things like a business owner would. Property management has a broad focus with constantly shifting priorities. How, and when, did Bentall Kennedy first approach the green movement? It’s been an interesting evolution. During my previous role [with Bentall Kennedy’s Strategic Resources Group] I went to one of the first green real estate conferences held in Canada. That was back in the mid2000s when ‘Green’ was just emerging, but we didn’t have a real sense of what it was going to mean to the industry yet. So, we just kind of dipped our toe in the water. We did a green cleaning specification very early on. Eventually, we saw potential in the green movement in real estate. We developed a strategic plan to address sustainability under the banner of a program called “Forever Green.” This plan continues to evolve and is constantly reviewed to identify priorities and improve performance. Today, sustainability encompasses so many aspects of what we do—energy, water, procurement, social engagement, giving back to the community, and transparency. It guides our residents towards behavioural changes that will improve the sustainable performance of our properties, and ensure that sustainability continues to be a differentiator for Bentall Kennedy. Beyond the obvious environmental and cost-savings benefits, what are some of the drivers behind your initiatives? In the residential space, you have a lot more opportunities to get people involved because they live in the buildings, so the benefits are more obvious. That’s why our “Forever Green @ Home” program
Industry Influencer is so successful. But beyond our tenants and residents, these days, more and more young people are selecting the kinds of organizations they want to work for based on the values the company embodies. When I was young, I just hoped to find a job I liked. But that’s changing. Employees are more engaged with sustainable initiatives and giving back to their communities. They want to see results and know they are part of something. Transparency is important. As an example, we have been doing greenhouse gas emissions reporting on all our asset classes for about seven years utilizing a customized system called Eco-Tracker. EcoTracker is fundamental for us to monitor and manage our conservation efforts, track our achievements and see what we have managed to reduce. Further, we were one of the first Canadian real estate firms to produce a public Corporate Sustainability Report. How important is innovation for driving success at Bentall Kennedy? Searching out innovative solutions and experimenting with sustainable technology, has tremendous value for us. In all our asset classes we invest a technical services group. In residential, one of our technical services team is a LEED AP and worked previously in the engineering field as a consultant. He is very
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Bentall Kennedy makes sustainability a priority in all its buildings Over in Calgary, Bentall Kennedy is busy constructing a new 26-storey highrise apartment located at 121 13th Avenue SW. When complete the 218-unit tower will offer a full slate of modern amenities and energy-efficient features, including high-efficiency HVAC, windows, plumbing and lighting, and coatings with low emissions of volatile organic compounds. But these energy-efficient features aren’t unique to this new Calgary building—Bentall Kennedy’s existing suites will also be upgraded as per the criteria below: • Vinyl plank flooring manufactured from 50 percent recycled material, and 100 percent recyclable • VOC-free paint in a virtually odourless formula • Cabinets made of recycled paper and FSC certified wood • Quartz countertops made of 90 percent recycled stone • Low flow faucets, shower heads and water-efficient toilets • Energy-efficient lighting and appliances
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Industry Influencer
committed to sustainability best practices. We look to him for a lot of our research and he helps drive a lot of initiatives —whether Eco-Tracker is Bentall Kennedy’s comprehensive energy, water, waste and emissions management it’s water reduction, solar heating or LED and reporting system. Supported by analytics and engineering, the management tool tracks data lighting. The coolest example I can think while continually expanding its capabilities over time. Eco-Tracker presents real-time consumption and of is a biomimicry product we used on one cost data in simplified views, while also verifying greenhouse gas emissions. This is just one of Bentall of our buildings out in B.C. Based on the Kennedy’s management tools dedicated to capturing and analyzing high quality data—a practice the lotus leaf, it actually sloughs off dirt so we company feels is fundamental to improving the energy and environmental performances of its real don’t have to clean the building as often, estate portfolio. which means saving water. With all these things, you just have to do your research, because not everything will prove to be first female property director. And that’s pride looking back and knowing I played viable. But with some digging, there’s a really not that long ago! Seeing women a role in guiding them. in the C-Suite in real estate was unheard lot you can do. of back then. You do see it today, but On a professional level, we still have a long way to go. The skill what are you most proud of? As a recognized leading woman of the sets, whether male or female, are no My biggest success is really those mentoring industry, what helped you get to where different—but what is different are the opportunities. Staying connected, maintaining you are today? How did I get where I am today…a lot of opportunities being offered. Mentoring relationships that continue today. Seeing hard work and tenacity! In the early days, is something that helped change this those young men and women succeed there were very few women in this business. for me in my early career. What I have makes me proud because of the role I played The property manager side had some, but done is to pay it forward, and now, to in helping them. That and the fact that I love it was rare to see one beyond that level. see that some of the men and women I what I do. I always have. You wouldn’t stay doing the same thing for1thirty four years if PM to mentor have become assistant In the mid-nineties, when I was promoted1 used TakeCover_CAM_August_2013_FINAL.pdf 13-07-22 2:54 Davroc_Condo_March_2014_FINAL.pdf 14-03-18 10:14 AM to a director of one company, I was their vice presidents and vice presidents, I feel you didn’t.
What is the Eco-Tracker?
26 www.canadianapartmentmagazine.ca
Newsworthy
Leading the Way to a Sustainable Future
Park Property President Gerd Wengler and OSEA’s Executive Director, Kristopher Stevens
Park Property Management is Honoured for its Green Efforts By Croydon Richmond
In early 2015, hundreds of sustainable energy leaders attended the Ontario Sustainable Energy Association’s (OSEA) 5th annual Powering Prosperity Awards dinner. These awards recognize outstanding accomplishments in eight award categories that span the breadth of community, aboriginal, public and private sector sustainable energy solutions. At the ceremony, Park Property Management Inc. was named one of the two winners of the Sustainable Project of the Year award. OSEA has been supporting a more sustainable energy economy in Ontario with support from diverse areas of the energy industry for over 13 years. “We congratulate Park Property Management on this welldeserved recognition,” said Ted Whitehead, the Federation of Rental-Housing Providers of Ontario (FRPO)’s Certified Rental Building Program Director. “This award exemplifies how many professional property management companies are making a difference in the ‘quality of life’ for their rental apartment residents while demonstrating an ongoing respect for the environment.” Park Property Management was awarded this distinction for its leadership role in terms of undertaking building retrofits (heating & cooling), actively engaging the building’s residents, and it’s involvement in local community building efforts. They were supported by the United Way’s Tower Neighbourhood Renewal (TNR) project at Thorncliffe Park in Toronto. The focus of TNR is to strengthen high-rise apartment communities and improve conditions for residents through supporting resident leadership, improving access to service, and community space creation at four demonstration sites. Park Property’s accomplishment was made possible through working closely with a sustainability team of professional organizations made up of Enbridge, the City of Toronto’s Tower Renewal group, United Way Toronto, and Toronto Hydro. With this supporting cast, Park Property Management leveraged the engagement of the community and local initiatives already underway, and dovetailed equipment and building retrofits including energy efficiency education for residents, and additional community building efforts. “We are proud to be a member of the sustainability team that helped to make a difference for Park Property’s residents at their Thorncliffe apartment community,” said Enbridge’s Erika Lontoc, Manager, Residential & New Construction Marketing. “Together,
all the partners were able to clarify heating and cooling concerns put forth by Thorncliffe Park residents, and then working closely with Park Property Management, they were able to address them promptly and in an energy-efficient manner – a double win for all.” “Park Property is delighted to be a recipient of this year’s OSEA category award,” said President Gerd Wengler. “The real winners of this award are our residents and the local community as they benefit mostly, over the long term, from the changes made.” OSEA recognized Park Property as “…a testament to how affordable and quality rental accommodations can be provided at a reasonable cost improving people’s lives through community empowerment, community and private space revitalization, increased comfort, and lower bills while reducing carbon emissions and improving efficiency” and stated that the company “…is an inspiration to other building owners and property managers as well as the residents of the Thorncliffe Park and an industry leader in building management and sustainability practices.” Park Property Management’s accomplishments are an example of what can be done when people and organizations work together toward a healthier environment. In line with this philosophy, FRPO took a step forward in corporate environmental responsibility for the rental housing industry, with its new Living GREEN Together initiative launch in 2013. The Certified Rental-housing Program (CRBP) established by FRPO is the only resident-focused ‘quality assurance’ in North America. The program’s new Living GREEN Together sustainability component is the first industry-developed environmental operating standards for multi-residential apartment buildings. By the end of the year, FRPO’s CRB program expects to have over 1,000 multi-res buildings housing 250,000 Ontario apartment residents all under voluntary compliance with its new Living GREEN Together standards. March/April 2015 27
Portfolio
Modular Apartments Offer Modern Solutions Why ‘Out of the Box’ Designs are fit for Mid-rise Dwellers and Owners alike By Derek Lobo
All too often, when people think about “going green,” they only think about green energy. They imagine buildings powered off nothing but solar or wind and outfitted with only low-flow water fixtures and high-efficiency lighting. But there’s more to going green than just green energy and high-efficiency fixtures. Really, going green is an entire mindset of doing more while using less. Advances in green technology have already arrived—and these are not only good for the environment, but they also make sound financial sense. One example of this emerging technology is modular apartment construction. Modular apartment construction is an emerging technology that’s gaining 28 www.canadianapartmentmagazine.ca
traction in cities across North America. Just as the name implies, ‘modular’ refers to apartment buildings that are composed of pre-assembled units manufactured off-site and stacked into place using a crane. After the finishing touches have been added, the end result is a two- to six-storey building that’s open for leasing in far less time than traditional methods, and without the typical hassles a lengthy construction process entails.
It’s important to note that these aren’t buildings built out of shipping containers, nor are they plain boxes without any character. Modular construction design has advanced tremendously over the past few years, producing buildings that look as attractive as they are distinctive. Big windows, large rooms and modern finishes are all part of the final package. Examples of complex multi-family buildings already exist in cities like Regina, Saskatchewan, Seattle, Washington, and San Jose, California.
Portfolio
The advantages Because modular apartments take less time to build, the costs and disruptions associated with the construction process are significantly lowered. With most of the work being done at a factory, on-site dust and noise are kept to a minimum, while less material waste is generated and fewer disruptions from weather incurred. Modular construction also reduces the gas emissions from construction vehicles—and most importantly, the shorter construction time allows units to be leased sooner, meaning investments are paying off for owners faster. Our changing cities Cities across North America are looking to increase their densities. Zoning bylaws are being altered to allow the construction of mixed-use mid-rise buildings along major avenues and public transportation routes. By doing this, cities will be able to use and maintain their infrastructure more efficiently, which is good for the environment and good for keeping taxes low. This new model meets the demands of the rising demographic of urban dwellers that are turning away from large, single-family homes in the suburbs in seek of denser downtown locations where amenities are within easy walking distance. Modular apartment construction also ably meets the zoning requirements of these mid-rise corridors. The buildings that are constructed are attractive and on a human scale. These are not towers in a park. With the lower construction costs of modular apartment design, the opportunity exists for cities to increase their densities quickly, meeting their goals sooner rather than later. Assuming that city planners are made aware of these benefits, this should help modular apartment buildings get through the development process more quickly. While there are many reasons to ‘go green,’ the benefit of cost savings achieved by modular construction is one that everyone can appreciate. Modular apartment design and the eco-friendly improvements that go with them are the way of the future because of how they speed up the construction process and lower maintenance costs. The planet wins, but so do the owners.
Examples of existing modular apartments: • Sky Harbour Estates, constructed by Devereaux Homes and Developments, is a six-building, multi-family rental complex in Harbour Landing, Regina, featuring 314 modular units. The building was constructed in 2012 and was the eighth modular apartment project developed by Devereaux to help address the historically low vacancy demands in the Regina market at the time. • N’ Habit is a 49-unit property at 2217 Third Ave. in downtown Seattle—the city’s first modular development. Built in 2013, the project took just seven months to complete, almost half the industry average of 12 to 14 months. PeoplesTrust_CAM_February_2015_FINAL.pdf
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Derek Lobo is President and CEO of ROCK Advisors Inc. Brokerage, a leading commercial real estate firm, which focuses exclusively on apartment brokerage services and on student housing real estate. Based in Burlington, Ontario, ROCK serves primary clients representing builders, owners and corporations of residential multi-family dwellings March/April 2015 29
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Management
Communicating your Green Initiatives How to Make the Most of your Earth-friendly Efforts By Jessica Green
30 www.canadianapartmentmagazine.ca
Management
If a tree falls in the forest and no one is around, does it make a sound? Well, when it comes to making green changes in your rental properties, the same theory applies. You might make small (or large) changes to reduce the carbon footprint of your building, but if you’re not marketing it properly, how are potential renters ever to know? A study released last summer by the Canadian Green Building Council shows that green renovation projects increase building asset values by a median four percent. Additionally, when compared with similar buildings, 82 percent of building owners that have incorporated green strategies into their operations reported reduced overall energy consumption. It’s evident that making these modifications and upgrades to your rental property will pay off when it comes to your bottom line, but you need to market yourself properly to feel the true impact of going green. Engage with residents First and foremost, you need to keep your current residents engaged and active in any green changes you wish to implement into your rental property. “We have actively worked to incorporate our residents into our greening strategies,” explains Amanda Boyce, Senior Marketing & Leasing Coordinator at Greenwin Inc. “By doing so, we have been able to determine the type of environmental projects that are most important to them. It’s a good way to stay on the pulse of what renters are looking for in a modern, eco-friendly building.” Working with your residents in such a way also allows you to promote ways that they can be green in their own apartments, benefitting the environment and their own pocket books. “We send out quarterly newsletters to all of our residents that offer tips on how to be greener, including turning down their thermostat in the winter, turning off or unplugging appliances that are not in use and information on composting,” adds Randy Daiter, Vice-President, Residential Properties, M&R Holdings. “It helps to show them that they, too, can make a difference, even if it’s in a small way.” (Read more about this in our “Ask the Expert” section, page 36.)
Upgrade your branding Branding is an important tool for creating a community culture in your rental properties, and it’s even more important when it comes to promoting your green initiatives. If, for example, you are a member of the Certified Rental Building Program (CRBP) and its new Living GREEN Together™ standards, why not add that information to your newsletters, information pamphlets, website and social media channels? Include any environmental certification logos in a visible place, so potential renters can immediately see your commitment to being a green apartment community. “Don’t be afraid to shout it from the rooftops that you have achieved a significant environmental designation as a CRB-approved Living GREEN Together™ building,” says Ted Whitehead, Director of Certification at CRBP. “Millennials, in particular, have shown that they are very concerned about living in a property that has environmental ethics as part of their overall strategy and commitment to their community.” When listing your vacancies online, either on your own website or on Internet Listing Sites like Kijiji, Gottarent or RentSeeker.ca, pointing out your how you’ve gone green—and plan to go green—are important ways to make you stand out from your competition. “Vacancy Filling 101 says that you need to demonstrate what makes you different, and that includes your green strategies,” says Chaim Rivlin, President of RentSeeker.ca. “Don’t be afraid to include things that you have not yet implemented, but will be implementing. This can include upgrades to your laundry facilities to reduce overall water consumption and the installation of solar panels. Give an estimated completion date so potential renters will know you’re serious about these projects.”
Walk the walk All of these environmentally friendly upgrades will mean nothing if your rental offices are not practicing being green themselves. Still wasting paper on printing out your newsletters and slipping them under the doors of your residents? Switch to email-only newsletters. Do you make potential renters fill out mountains of paperwork? Take it online and have them submit their electronic application to you. “A tablet is a modern way to take your rental offices in a more ecofriendly direction,” adds Boyce. “When showing an apartment, bring the tablet along to allow applicants to enter their information securely rather than writing it down on paper that will just end up being filed away and eventually added to landfills.” Adding an electronic portal for your residents to submit maintenance requests, pay their rent and more is another way to create an online paper trail that reduces the amount of actual paper your office uses. Not only is the portal a valuable amenity that residents will love, but it will make your life much easier. Keeping track of requests and updating information can be done with the click of a button rather than shuffling through stacks of paper. If you’re going to go green, don’t be afraid to make noise about it. Show your community and residents that you care about the environment and that your rental property will be a leader in the green evolution.
Jessica Green is the founder of Cursive, a Toronto-based communications consulting firm that specializes in brand messaging with an emphasis on digital media strategy. March/April 2015 31
Insurance
When Accidents Happen No One Wins When “Slip and Falls” Lead to Liability By Andy Schwartze
For more insurance tips, visit
32 www.canadianapartmentmagazine.ca
This past February was a record cold month for residents of Toronto and the surrounding region. Along with the relentless ice and snow came frozen pipes and equipment malfunctions, putting many home and apartment owners on the hook for expensive repairs. Another common occurrence that accompanies the bitter cold is ‘slip and falls.’ I recently received a video of an apartment tenant dressed in nothing but a short sleeved blouse and house slippers, heading from the back door of her building to toss a bag of trash into the dumpster. The video shows that while some snow is on the ground, the walkway areas are clear. As the woman steps off the curb, she slips and falls. After a brief moment, she gets up, brushes herself off, deposits the trash bag and walks back into the building. Since the incident, the woman has reported various injuries from the fall, accompanied by several unrelated angry complaints about the landlord in an attempt to “soften” up the liability insurer. It may
Insurance surprise many to hear that is it somewhat irrelevant whether or not the adjuster recommends a “quick” settlement, as the success of the complainant’s case will be driven by her level of anger and the desire to get the insurer to cough up money. In this particular case, the annual insurance premium paid by the building is about $8,000. The insurer, a typical property/casualty carrier, operates on a break-even of about 65 percent. This is quite normal in this sector as distribution, administration and reinsurance costs are higher than in certain other financial services sectors. With just over $5,000 “in the account” for this property, the insurer must now defend the building owner (as it rightly should) and, at some point, decide whether or not to continue the fight or close the file and leave a settlement offer on the table. It does not matter how this file is ultimately closed; the result will be unhappiness all around. The complainant will have a soured attitude toward the building owner and insurer, while maintaining a complete failure to understand that one does not go outdoors in Canadian winter weather dressed in house slippers. Denial and the refusal to accept responsibility for one’s own actions so often dominates these cases. The landlord will be angry at the tenant for having tried to “raid the cookie jar” with what is correctly perceived as a claim that is entirely the fault of the person who fell. In addition, the building owner will accuse the insurer of not having fought the case to an ultimate victory against a “fraudulent claim.” Dissatisfaction can be the only outcome, and the insurer’s best case scenario is that the costs (adjusters, lawyers, if any, and payment) have been as low as possible. It doesn’t take long for $5,000 to disappear in these situations. Nobody wins; everyone is unhappy. The really interesting thing about these cases captured on video is that, while they can enhance the ability of the insurer to defend the building owner, they are not a guaranteed defence. I like to use the phrase “legal harassment” in order to describe this type of claim. Similar to corporate raiders in the public markets, the aggression simply wears everyone down until someone blinks and writes a cheque. Contingency fee cases are often the most difficult opponents for an insurer to deal with, as there has been an investment in the time that the case has used up by the legal advisor who would like to get paid. For the insurer, each case is a cost that needs to be minimized and, at some point, the
claims manager makes a decision to cut the losses and move on. Until someone invents a better system, this will remain one of the claims realities that owners have to continually wrestle with. As for the poor lady who slipped and fell; if the insurer decides to pay a little to make the problem disappear, her lawyer will get almost all of it and she will be left wondering what happened to the settlement she thought she was entitled to.
Andy Schwartze, BSc., MBA, CIP, is an insurance broker specializing in property management and real estate. He is a former President of the Insurance Institute, has taught in the community college system and provides continuing education to other brokers. He can be reached at andy@takecover.ca. For any comments, you can go to www.takecover.ca and post them on their new blog.
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Marketing
Everyday Ways to Save Reducing Energy Consumption Begins with Changing Behaviour By Chaim Rivlin
Statistics Canada research shows that Canadian households have reduced their energy consumption by approximately 20 percent since the 1990s, suggesting that the environment has become a top priority across the nation. Yet despite this improvement, there is still much that can be done—particularly in the apartment sector. By working together and changing common behaviours, property managers and tenants can limit the impact of their everyday activities without incurring additional expenses. In fact, simple communication—i.e. sharing tips and expectations via e-newsletters and posted memos—is the first step toward creating a greener building; taking action is the second. Switch out those bulbs One of the easiest things property managers can do to reduce energy usage in their buildings is switch to compact fluorescent bulbs, which not only consume less energy but also last much longer than their incandescent counterparts. “With recent changes to how light bulbs are sold in Canada, we’ve been able to encourage our tenants to make the switch to compact fluorescents rather easily,” says Lidija Mandic of MetCap Living. “When a tenant moves out, we go in and replace the bulbs with compact fluorescents ourselves before the next tenant moves in. We also speak to prospective and new tenants about our green initiatives prior to them moving in.” Encourage cold water washing Let’s face it—everyone has to do laundry at some point, and washing machines and dryers are two of the biggest energy drainers around. To help reduce energy bills and overall consumption, post notices in your laundry rooms that encourage your tenants to use cold water instead of warm or hot.
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Marketing
“We find that most tenants are very receptive to making changes to how they do their laundry, as it is a small but very impactful step,” says Cindy Roy of Osgoode Properties. “We encourage our tenants to use laundry detergents that are specially formulated for cold water washing that will ensure their clothes are still thoroughly cleaned without wasting energy on heating up water.” Lead by example Property managers can make a huge difference on the green impact of their buildings by simply showing their tenants they care about environmental issues. Upgrading appliances to Energy Star certified ones will decrease the amount of energy used by the building as a whole. In many cases, there are government rebates associated with purchasing and using Energy Star certified appliances. Another smart option is to install low-flow showerheads and toilets, decreasing the overall amount of water used by the building. Include blinds and draperies in all suites to encourage heating and cooling regulation without the use of electricity. When an apartment is vacant, unplug all appliances and turn off utilities until it is rented to a new tenant. Prioritize together Property managers and tenants can make huge strides by identifying what is important to them as a community and making green-minded decisions together. For example, if the tenants all agree they don’t like receiving junk mail, putting up a sign prohibiting the delivery of unwanted newspapers and flyers makes everyone happy while also reducing waste. If recycling is a priority for all, ensure containers are placed where they are most likely to be noticed and used. Encourage open communication and ensure tenants know they can approach management with any concerns, ideas or problems. “We create an open dialogue with our tenants so they know they can come to us and have an issue resolved promptly,” says Jessica Green of Greenwin. “If they
feel a draft coming from their windows in the winter time, we ensure we are readily available so they can come to us and have us fix the weather stripping immediately. Just by being visible around the building, we are able to nip potential energy problems in the bud.” By working together and making small changes, the environmental impact of your apartment building can be greatly reduced—and that is something everyone can feel good about.
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Ask the Expert
Engaging Tenants in Energy-Savings Initiatives Tips and Strategies to Maximize Participation and Drive Success When it comes to energy and green initiatives, we all know tenant participation is critical. Randy Daiter, vice president, residential properties at M&R Holdings has been in the property management industry for nearly 30 years. To maximize tenant participation and help drive success, we asked Randy for some strategies that work. What are some of the biggest challenges property managers face when trying to implement energy and green initiatives? There can be many but some of the biggest challenges include tenant buyin, effective communication, tenant participation and on-going cooperation. We’ve broken conservation initiatives down into mandatory vs. voluntary initiatives. Mandatory initiatives include items like window replacements, lighting retrofits, variable frequency drives, electrical sub-meters, low-flow toilets, and energy star laundry equipment. Voluntary initiatives include things like recycling and organics. The way we approach these challenges varies depending on whether the initiatives are pushed-down from head office or hinged on tenant participation to be effective. What are some of the engagement strategies that work most effectively? At M&R, we implemented a 3-step engagement model that really works well. Step 1: Sharing the vision with the tenants through newsletters, posters, special events, notice boards, letters
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and even a tenant portal. Step 2: Listening to the desires and recommendations of the tenants. This is simple and has a profound impact. By accepting feedback, we not only create a relationship which allows for higher buy-in from the tenants, but it also reveals new opportunities that wouldn’t otherwise be considered. Step 3: Partnering with the tenants to develop a sense of unity and trust. Finally, it’s critical to repeat this model over-and-over throughout the project. By following this model, we have implemented our most successful initiatives. What are some examples of your recent initiatives? The first example is a mandatory initiative that involves window replacements at two of our buildings. Quantitative benefits include estimated gas savings between 27-29 percent, a six figure increase in NOI, and a double-digit ROI. Qualitative benefits included increased tenant comfort, enhanced interior/exterior aesthetics and improved marketing efforts. The engagement model was comprised of a window mock-up, listening to the tenants and consulting with them on design and colour. Innovative ideas were brought forward from this model, including an access panel for Christmas lights on the balconies and magnetic curtain rods for balcony door windows. The second example is based on a new recycling and organics program, a voluntary initiative we implemented across two buildings. Solid waste was lowered by 11 percent in one year. Overall diversion rates went from the bottom quartile to the top (of 130 similar benchmarked buildings in Toronto), and there were less overall costs and odour. The engagement strategy consisted of convenience, student volunteers, enforcement and education. Enhancements included lowering the access to recycling enclosures for seniors; renovating chute rooms; setting-up information kiosks at tenant barbeques, enhancing lighting; installing canopies over pathways; the use of bin buggies and engineering sliding garbage enclosure doors (in lieu of swing doors). Overall Tips to Encourage Engagement: • Engage and educate employees before tenants (builds a sense of pride and ownership) • Explain the benefits before the project begins (builds excitement) • Maximize convenience / ease-of-use (to encourage participation) • Use multiple communication tools with consistency (tenant newsletters, notice boards, surveys, staff newsletters, online texts and email blasts) • Measure results and repeat engagement model (sharing vision, listening and partnering)
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Smart Ideas
Online Resources for Property Manager Connecting tenants and landlords just got a little easier... Custom websites for property managers and owners Landlord Web Solutions is a Canadian-based design and online marketing company that caters exclusively to the rental industry. Co-founded by Jason Leonard and David Koski in 2010, LWS is quickly becoming a leading supplier of online services. Over the past number of years, LWS has been expanding its offerings to include everything from search engine optimization and custom photography to programming and design services. From the company that brought us the online global payment network, Rentmoola, LWS is now serving some of the largest property management firms in Canada. www.landlordwebsolutions.com
Online platform seeks to ease the process of renting an apartment Waterloo-based Apartmint recently expanded its services to Toronto and Windsor, Ontario, helping prospective and existing tenants search for available apartments in their neighbourhoods and communicate easily with landlords. Formatted for use from a mobile phone or desktop computer, the site features a section for tenant profiles, which can double as rental applications. Soon users will be able to provide public ratings of both tenants and landlords—a feature that aims to alleviate the prevalence of scams, fake and expired listings, and inaccurate information. www.apartmint.ca
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