Transcript Slide 1
Economic Realities
for Sustainable Real
Estate
34th Annual Real Estate & Economics Symposium
Fisher Center for Real Estate & Urban Economics
University of California at Berkeley
Green Retrofit Lending
Enterprise Overview
Our mission is to create opportunity for low- and moderate-income
people through fit, affordable housing and diverse, thriving
communities
Since 1982, Enterprise has invested more than $11 billion to build or
preserve more than 300,000 homes across the United States
We are a leading provider of financial and intellectual capital for
affordable housing development
Environmental sustainability is embedded in our mission and will
ultimately infuse all aspects of Enterprise’s activities and operations
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Retrofit Process
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Review
Building
Portfolio
Select
Building to
Receive
Energy Audit
Choose
Energy
Auditor
Perform
Building
Audits
Review Audit
Results, and
Select
Upgrades
Cost and Bid
Out
Improvements
Finalize
Funding /
Financial
Package
Install
Improvements
& Monitoring
System
Verify
Installation
Train
residents and
maintenance
staff
Monitor
savings and
health
improvements
Make
Adjustments
(As
Necessary)
ENERGY SAVINGS, WHAT SAVINGS?
Audit Findings from 32 Buildings:
From the Bay Area (19 buildings) and LA (13 buildings)
Master metered (17) and Individually metered (15)
Low rise (10) and High rise (22)
Total 2,227 units
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AUDIT FINDINGS
Reduction in energy costs over existing conditions:
Utility savings* in master metered buildings ranged from
a low of 10% to a high of 47%; average = 26%
Savings in buildings with a combination of master and
individually metered utilities ranged from 19% to 45%;
average = 28%
Per unit savings averaged at $270 per unit per year
* Gas, electric & water
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WHERE DID THE SAVINGS COME FROM?
Efficiency Measures that resulted in the highest Savings to
Investment Ratio:
Domestic Hot Water
Interior Lighting
Thermostats
Exit Lights
Low Flow Toilets
Heating boiler
Air Handling Units
Retrofit cost per unit – ranged from < $1,000 / unit to a
high of $11,000 / unit; average = $5,000 / unit
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The Bay Area Multifamily Fund (BAM Fund)
An innovative effort to improve
energy and water efficiency in
older affordable multifamily
buildings
Provides free energy audit,
technical support, and favorably
termed debt.
Leverages other resources
Located in nine county Bay
Area
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GOALS of the BAM Fund
Improve property cash flow
Improve health of buildings and residents
Reduce greenhouse gas emissions
Link to green jobs programs
Enable retrofits to occur more quickly than a full
rehab
Prove the concept that energy savings can be
projected with accuracy and monetized to drive debt
that can be raised from the capital market.
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BAM Fund Loan Terms
Interest Rate
5%
Loan Term
10 years
Debt Coverage Ratio
1.15 – 1.25
Security/Collateral
unsecured; flexible
guaranty
Repayment Source
amortized monthly
payments
Loans repaid with savings achieved as a result
of the energy and water efficiency improvements
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Projected Energy Savings and Debt Service Calculations
EXAMPLE #1: Oakland, 98 units of family housing
Historic mid-rise building
COST OF IMPROVEMENTS:
ENERGY SAVINGS:
DEBT LOAD:
$358,182 ($3,654/unit)
$13,327/year
$83,770
Projected Energy Savings Over
Current Use: 17% (includes water)
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Exhaust Fan Testing
Proposed Financing Scenario
DEBT
$ 83,770
Weatherization
$ 142,472
CA Solar Thermal
Rebate Program
$ 50,000
City Housing Funds
$ 81,939
$ 358,182
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Example #1 Project Budget Scenario
Toilets (dual flush converters)
Lighting controls
DHW - Boiler Replacement
Exit lights
HHW - Boiler Replacement
Roof insulation
Roof covering
$5,288
$1,087
$15,217
$4,935
$51,712
$18,406
$115,500
Common Area Refrigerator
DHW - Solar preheat array
Public toilet replacement (low
flow)
Service doors (flush metal)
Windows - wood
Smoke/Fire Detectors
$646
$122,067
TOTAL
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$823
$7,109
$3,878
$11,515
358,182
Learnings to Date
Energy savings may not be adequate to support the level of
debt desired
Owners are wary of borrowing based on “projected” energy
savings
The energy audit process is complex….need to be clear about
assumptions being inputted into the energy model, and the
outputs desired
Monitoring utility data pre and post retrofit will be extremely
important to proving that energy savings can be projected and
monetized to leverage capital
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www.enterprisecommunity.org
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