Particularly top of mind for student residents and always top of mind for an operator’s bottom line, savings and new technology controls for energy and utilities continue to be drivers in the student housing industry. To see what the current generation of residents and owners are seeking, Student Housing Business spoke a few players in the energy and utility fields to gain insight on recent trends in the sector.
With the increased dependence on remote technologies and smart-enabled devices, especially during the pandemic, the smart-enabled apartments and communities have become a mainstay in the student housing industry.
“From managing access to common areas, to taming energy bills with smart thermostats, smart automation platforms are no longer a luxury — they’re a necessity,” says Keenan Cheung, vice president of sales, student housing of Scottsdale, Arizona-based SmartRent. “Communities that don’t grow to meet this expectation will only lag further behind smart communities that offer everything college students want and savvy operators crave.”
SmartRent offers smart thermostats that enable operators to slim energy bills and reduce consumption by configuring baseline settings, which lower energy costs without robbing residents of the ability to adjust thermostats when at home, notes Cheung. The company also offers leak detection sensors, which can decrease water damage expenses by 70 percent to 90 percent, and managed Wi-Fi that provides increased connectivity of installed smart home devices without overburdening existing networks.
For operators the appeal of smart technology is often two-fold — an increased interest in sustainability and reducing general maintenance and utility costs. As energy prices continue to rise — and negatively impact net operating income — operators are seeking ways to tackle rising energy costs, and so the need for smart energy management solutions has become a priority, explains Rafa Carvajal, CEO of Miami-based TrustHab, a sustainability solution that leverages smart devices to deliver valuable insight and actionable data to enable property managers to identify cost-saving opportunities.
Through the installation of smart devices, sensors and the implementation of an energy management solution, property management teams are empowered by real-time data to proactively address maintenance issues, conserve water, reduce HVAC runtimes and overall lower utility bills.
On the residents’ side, many of the management solutions, including SmartRent, TrustHab and SimpleBills, a RealPage company, offer resident-facing apps that allows students to remotely control smart devices in their homes, obtain access to residences through smart locks and reduce monthly expenses by controlling energy consumption.
“Creating utilities efficiency within the built environment is an easy win-win-win for residents, operators and the environment,” says Richard Randall, CEO of Denver-based Echelon Energy. “Our products and program maintain a high livability standard for residents, save landlords significant operating expense, bring a quantifiable improvement to reducing carbon in the atmosphere and help reduce the burden on municipal water supplies.”
Generating returns on invested capital of 25 percent to 45 percent on average, Echelon Energy’s turnkey technology-enabled solution identifies utilities savings opportunities, implements appropriate technologies and acts as an owner’s active energy manager to verify and report the impact of any upgrades or adjustments, from lighting upgrades and HVAC controls to high-efficiency water fixtures and smart irrigation solutions.
“Coming out of the pandemic, the demand is stronger than ever for healthy and sustainable spaces,” explains Lacey Lott, director of sustainability with Exton, Pennsylvania-based Evolution Sustainability Group. “Student housing operators are under pressure to demonstrate strong sustainability performance through green building certifications, building efficiency upgrades, renewable energy purchases and strong environment, social and governance (ESG) metrics.”
Evolution Sustainability Group’s suite of services includes building efficiency projects such as LED lighting and smart thermostats; competitive energy procurement with green options like Green-e RECs and carbon offsets; and onsite renewable projects like solar panels and electric vehicle charging stations. Additionally, the company offers sustainability services, including green building certifications, local law benchmarking and ESG reporting.
Evolution’s offerings appeal to Gen Z’s sustainable shrew consumer mindset and its green building certifications reward health-focused amenities tenants want while increasing asset value.
“Our energy efficiency projects demonstrate strong building performance for investors and tenants alike, while our strategic energy procurement offers energy risk management balanced with capturing opportunities for savings,” notes Lott.
The company provides operational savings through strategic energy purchasing and energy efficiency projects, while also increasing asset value by meeting the demands of stakeholders, including tenants, by managing costs and offering sustainable options.
Outfitting properties with smart technology increases resident satisfaction while enabling management to have more insight and control over energy and utility consumption resulting in wins for residents and operators alike. Beyond the initial benefits of lowering monthly expenses, many energy and utility management companies couple billing and utility splitting with their services.
SimpleBills offers a suite of services that work together to reduce over utility expenses bundled with resident billing and collection. The company’s sustainability services leverage a nationwide utility expense database to provide extensive analytics, reports and alerts that help clients identify challenges, leaks, variances and variance resolution, notes Maliece Sorrows, industrial principal of SimpleBills, RUM, Sustainability, RealPage. SimpleBills’ solution enables clients to harness the power of their utilities through energy procurement, rate and tax assurance, mandatory benchmarking, ESG reporting through Measurabl, an ESG platform for commercial real estate, and energy and water conservation.
The numbers speak for themselves. Through the RealPage Sustainability Energy Conservation Audit and Conservation project, a recent case study resulted in an annual usage savings of 37 percent and expense savings of 32 percent, equating to annual savings of $73,322, or $183 per unit for a 401-unit property.
SimpleBills’ utility expense management service provides automated invoice processing, missing bill audit and utility providers’ bills paid on-time with no pre-funding required from clients, while RealPage Smart Waste Management Solution reduces the cost of managing waste and recycling programs, including ruggedized cameras for each container, analytics and actionable alerts that give clients visibility into per unit waste costs, contamination fees and diversion ratios at the property and portfolio level.
Designed specifically for the student housing market, the SimpleBills model enables the company to manage the relationship between the resident and utility provider. The company bills and collects directly from residents, which means the property owners are only responsible for common area and vacant expenses and unpaid resident balances. Additionally, SimpleBills splits the bill between residents to create a ‘utility by bed’ model that complements lease-by-the-bed properties, creating 100 percent paperless bills delivered and managed in an intuitive self-service portal.
Residential desire and the ESG momentum are the current drivers that are changing the landscape for energy use, waste and natural resource conservation.
“ESG considerations can also help evaluate any environmental risks a company might face and how the company is managing those risks,” says Sorrows. “Recent evidence shows that ESG data helps investor mitigate against knowable risks and has become a core to best risk management practice.”
Sorrows notes that more than $500 billion flowed into ESG-integrated funds in 2021, contributing to a 55 percent growth in assets under management in ESF-integrated products. “Growth in ESG investing will continue well into the future,” Sorrows adds. “Increasing investor interest, a sharper corporate focus and a significant improvement in data provision are all set to further support the growth in sustainable investing.”
Coupled with these drivers is the increased technology that owners have at their disposal to reduce utilities expense alongside reduced capital costs associated with installing it, notes Randall.
“For example, the payback period on LED light bulbs was as high as 20 years a decade ago, but today can be as short as one year,” explains Randall. “That is a proxy for the entire utilities’ efficiency space, and we foresee that trend continuing in coming years.”
Aligning with the Best Partner
While the benefits of energy and utility management stand on their own merits, finding a partner that best aligns with a property’s needs and residents’ desires is paramount to a successful experience. Effective experiences usually involve an easy installation process, ongoing technical support and a fast return on investment, explains Carvajal. Companies that are continuously updating apps, services and solutions to meet the current demands and ever-changing technologies are key to ensuring a positive experience for both property management teams and residents.
TrustHab’s most powerful use case involves a student housing property in Syracuse, New York. The company set up 40 smart thermostats in common areas, and after a short duration of monitoring, TrustHab was able to implement setpoint limitations and scheduling changes that resulted in a 45 percent reduction in HVAC runtime.
Lott’s top tip for creating a successful experience is appointing one person as the source of all energy and utilities management, for an entire portfolio, if possible. “We often find that while these are major operational expenses, they become scattered across geographical and organizations functions resulting in disjointed management,” explains Lott. “It helps to have one person as a central resource to monitor and analyze consumption, review billing and contracts and meet with vendors.”
Having the right mindset about driving a positive environment impact is also key to a fruitful partnership and experience. Making a positive impact does not have to cut into returns, and when done right, it can increase returns, notes Randall.
Cheung echoes the need for understanding and education encouraging operators to get acquainted with smart home automation platforms and everything they can offer, then do what is within your community’s budget to partner with a platform that will automate energy and utilities management and provide other benefits, like contactless move-ins and -outs.
“Contactless turns alone will save providers an incredible amount of labor and utility spend, since platforms handle access control and regulate temperatures in each unit,” explains Cheung. “With these benefits, you no longer need to manually revoke access to each and every door and double-check the thermostat settings in every dorm.”
Above all, communication and collaboration are key to fostering a partnership between energy and utilities management teams, property team and residents. Sorrows notes that it’s crucial to beware of ESG momentum, understand the goals of owners and investors and maintain continuous monitoring of month-over-month utility expenses to proactively look for opportunities to reduce and minimize risk.
—Amy Bigley Works
This article was originally published in the September/October issue of Student Housing Business magazine.