Sustainability and green initiatives, while good for the environment, are often perceived as more costly than the "old way" of doing things.
But in the case of green financing for multifamily properties, the c financing is actually more affordable than traditional financing. And as more investors are using green financing, they're discovering a surprising number of benefits they hadn't anticipated: better quality assets, lower tenant turnover, fewer tenant complaints and higher cash-flow.
Stratford Partners--a San Diego-based private real estate firm focusing on multifamily properties in the Western U.S. with a portfolio including approximately 3,000 units valued at around S350 million--is a case in point. Mark Hailing, principal and director of portfolio management, said that last year the firm closed two green financing deals.
He called those deals "game changers."
"What initially attracted us was that the terms were better than the standard options," said Hailing. "The interest rate was 20-30 basis points lower, which meant a few hundred thousand dollars more in proceeds," he added.
MULTIPLYING THE BENEFITS
The increase in net proceeds, however, turned out to be just the tip of the iceberg.
"By going through the process, we received a tremendous education on the utility efficiency of our buildings," he said.
Hailing and his partners said they gained expertise that they now apply to all properties in their portfolio. "Once we became educated about the value of green financing, we began tracking utility billing on all of our properties by...
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