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Sustainability is a Vital Component of Castle Lanterra Properties’ Investment Strategy

| June 15, 2017 | 0 Comments

Castle Lanterra Properties, LLC
One Executive Blvd., Suite 204
Suffern, NY 10901

Media Contact: Karen Ravensbergen / (201) 796-7788 / @carylcomm

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SUFFERN, N.Y., June 15, 2017 – For Castle Lanterra Properties (CLP), “going green” is about far more than installing smart thermostats or LED lighting. The Suffern, N.Y.-based, privately-owned real estate company sees sustainability and energy efficiency as integral to its investment strategy – which is delivering consistently strong returns.

In today’s multifamily real estate industry, sustainability initiatives go well beyond implementing green practices. Apartment buildings are being constructed and renovated to have a lower environmental impact as well as offer greater comfort and functionality for tenants.

“Issues such as climate change have become increasingly more important, not just across the country but specifically among our resident base,” said Elie Rieder, CLP’s founder and CEO. “In the past we have included green initiatives in our property upgrades on a project by project basis. As our process has evolved, we have become more holistic in our approach to incorporating sustainability as a vital component of our investment strategy.”

As an investor and owner, CLP is focused on the acquisition of multifamily apartment properties that provide solid risk-adjusted returns. The firm identifies fundamentally sound markets that have the necessary attributes to support long term rent growth and sustained market appreciation. Key value and growth drivers include supply/demand imbalance, positive income and population growth, strong corporate presence, favorable business climate, diverse local economy and high living standards relative to price. Upon acquisition, a targeted renovation program is carried out at each property with the goal of providing higher living standards for residents and maximizing the value of the asset.

Focus on Energy Efficiency

Several years ago, CLP began to focus on energy efficiency as part of its due diligence and acquisition process. The first step was installing new LED lighting packages in communities where energy costs were running high.

“Depending on local rates and system efficiency, we typically see substantial savings to the extent that we have payback in investment due to lower rates,” said Austin Alexander, CLP’s Managing Director. “It’s an initiative that also benefits residents by providing better light quality.”

Alexander noted that lighting upgrades have been expanded to include replacing halogen or incandescent light in the units themselves. “Maintenance techs no longer have to keep changing light bulbs, so it’s one less service call they have to make. Residents have lower electricity costs as well.”

The firm is tracking energy consumption for each community and comparing it to other properties in the market. “We’re starting to see a shift towards using third party monitoring services in managing high end properties, and we’re pushing our property managers to adopt similar strategies at all of our properties,” said Alexander.

To date the firm has instituted energy saving initiatives at each of its 17 multifamily properties. In line with its strategy of upgrading underperforming assets, CLP prioritizes improving efficiency in older properties like Midpointe Apartments, a 1970’s vintage, 424-unit complex in Chicago. New roofs, higher quality insulation and LED lighting retrofits have helped lower energy costs while improving the residents’ quality of life.

Water conservation is a key concern that is being addressed across CLP’s portfolio, with upgrades that include low flow faucets, more efficient showerheads, and toilets that use fewer gallons per flush. In addition, all newly-installed appliances are ENERGY STAR® certified and smart thermostats such as Nest are being tested at several properties.

The firm is also committed to sourcing recycled or sustainable materials whenever possible for property renovations. “One example is Asher in Austin, where we used reclaimed timber for the clubhouse renovations and recycled glass for countertops,” noted Jim Brady, vice president of operations and property management.

Solar power is an area that CLP has been exploring. One of the firm’s Austin properties, the 455-unit 1825 Apartments, has rooftop solar panels that power most of the common area amenities, offices and clubhouse. Brady says the firm considers this property a good case study for expanding the use of solar in the future. “We’ve seen significant cost savings at 1825. As prices continue to fall on solar panels and energy storage systems become less expensive, we hope to roll out similar initiatives at other properties.”

Expanded Investment Strategy Includes Sustainably-Built Assets

CLP’s 2015 acquisition of Harbor Pointe represents its initial foray into sustainability. The 544-unit apartment community, situated on 7.4 acres along the waterfront in Bayonne, N.J., was built in 2010 and is LEED Silver certified. The property features an array of amenities, including a 9,000-square-foot clubhouse, fitness studio, indoor basketball half-court, children’s playroom, a resort-style saltwater pool, and a seven-story parking garage. CLP’s enhancements to date include unit renovations, a new fleet of bus shuttles for residents, an automated package concierge system, a comprehensive security and video surveillance system, and replacement of all existing door locks with electronic key fobs.

Recently CLP has expanded its traditional value-add acquisition strategy to include newly-constructed, best-in-class assets, with an eye for properties that are sustainably built. “Our last three acquisitions are Green Globes® certified through the Green Buildings Initiative,” said Rieder. In addition to reducing operating and maintenance costs, this allows the firm to lower its financing costs with lenders like Fannie Mae, who offer a discounted rate for properties that meet specific sustainability requirements.

“As we continue to pursue new investment opportunities and expand the CLP platform, we expect to capitalize on the increasing demand for energy efficient and sustainable living spaces,” said Rieder. “It’s clear that a commitment to being environmentally responsible is a strategy that enhances the appeal of assets to both our tenants and investors.”

Formed in 2009, Castle Lanterra Properties is a privately held real estate investment company focused on the acquisition and management of quality income producing multifamily properties within strategic growth markets throughout the United States.  Through a rigorous value-enhancement program that includes thoughtful renovations, operational improvements and ancillary income development, CLP aims to reposition each asset with the goal of maximizing NOI, elevating its competitive position within the market, and providing attractive risk-adjusted returns for its investment partners. Castle Lanterra Properties currently owns and manages a portfolio comprised of over 8,500 units and a value in excess of $1.5 billion.

Photo Caption: Exterior lighting at Harbor Pointe was switched to LED bulbs and fixtures.


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