Platinum Power

Codding Enterprises of Rohnert Park, Calif., is getting back into residential development in a big way. The shopping center-centric company, which boasts turn-of-the-century home builder roots, is manning a 10-year build-out of Sonoma Mountain Village, a $1 billion multiuse project to include 1,900 housing units and 750,000 square feet of retail space. Helping to power the community is a 90,000 square foot array of solar panels, the largest private installation to date in the state of California.

“Three years ago I became CEO, and we conducted an inventory of our assets that showed our portfolio was roughly 80 percent covered malls,” says Codding's chief, Brad Baker. “We decided we did not want to compete against the Westfields of the world in what was really becoming a national business. When the property suitable for a mixed-used community became available via auction, we jumped at the opportunity.”

Codding's $40 million bid for the former Aglient Technology Campus was the winner, and almost immediately the thinking turned to sustainability. “We knew we wanted to have a new urban foundation with narrower streets, taller buildings, mixed use—and by the very design of New Urbanism, you have a fairly environmentally friendly platform,” says Baker, who has long been involved in alternative energy as the founder of a bio-diesel company. “We refer to Sonoma Mountain Village as a deeply sustainable community that takes a holistic approach to green building.”

SOLAR SYSTEM: Roughly 90,000 square feet of solar panels will power Sonoma Mountain Village, a mixed-use development in California.

In addition to the solar array, Codding will also incorporate rainwater collection cisterns for a green-friendly flush factor and is grinding up the asphalt parking lots currently on site to reuse for the development's bike trails and minimized street space.

Residential construction on a mix of 900 apartments and 1,000 single-family units is set to begin in 2008. “Phase one was to revitalize the commercial core,” says Baker, noting that Codding itself has relocated its corporate headquarters to Sonoma Mountain. “Phase two will be residential and retail. We are right in the middle or our environmental impact report process and hope at this time next year we will be starting in on that phase two. To build that out is probably another 10 years, depending on how the market reacts to the project.”

Eventually, Codding aims to apply for Platinum-level LEED certification on the entire project. Extending light-rail to Sonoma Mountain from nearby Cotati station could help with the credits necessary for certification, a proposal that was narrowly defeated in a local referendum. “We needed 66.6 [percent] and we got 66.4 percent of the vote, but we'll go back to the ballots in 2008 and think that it will happen,” Baker says. “We are certainly designing for that.”

Pittsburgh-based PNC Financial Services Group announced in May that it has signed a definitive agreement to acquire ARCS Commercial Mortgage, the No. 1 Fannie Mae lender for the last several years. For PNC, which is not a Fannie Mae Delegated Underwriting and Servicing lender, the deal will significantly bolster its agency lending business and complement its work as a Freddie Mac Program Plus and FHA Multifamily Accelerated Processing lender.

The consolidation is another sign of the need for lenders to offer a full spectrum of products to compete effectively in today's aggressive lending environment. “The industry has changed,” says Howard Levine, founder and CEO of Calabasas Hills, Calif.-based ARCS. “Being just a Fannie Mae DUS lender without the banking balance sheet and the conduit capability, we were at a disadvantage compared to most DUS lenders that have sold off to major financial institutions.” —Jerry Ascierto, senior editor of Apartment Finance Today and Affordable Housing Finance, sister publications of MULTIFAMILY EXECUTIVE

Voters in the Dallas suburb of Farmers Branch approved a ballot measure on May 12 prohibiting landlords from renting to undocumented aliens. The measure, which was backed by City Councilman Tim O'Hare, passed with 67 percent of the vote. “This sends a message loud and clear that illegal aliens are not welcome in Farmers Branch, Texas,” O'Hare told reporters following the vote. Dallas lawyer Bill Brewer plans to challenge the referendum in the courts. Pending the outcome of those legalities, the measure will go into effect on May 22. —C.W.

The National Multi Housing Council's Multifamily Information and Transactions Standards data standard is helping the emergency relief efforts in the Gulf Coast. HUD's new National Housing Locator System will be built using the standards created by NMHC's MITS initiative, which created a common data standard that allows apartment-related software packages to communicate with each other. HUD's system will help disaster relief aid workers locate vacant rental housing near disaster-affected areas. —R.Z.A.

Looking for a historic tax break? A 36-block area surrounding New York City's Wall Street district has been entered into the National Register of Historic Places, opening up tax incentives for the preservation of these historic buildings. The district will stretch approximately from Trinity Street in the west to Pearl Street in the east, Maiden Lane in the north, and Bowling Green in the south. —R.Z.A.

Carrolton, Tex.-based multifamily industry software provider RealPage announced April 14 its acquisition of Multifamily Internet Ventures, the parent company of LeasingDesk Insurance Services. As the largest provider of resident insurance programs for the multifamily industry, LeasingDesk considerably expands RealPage's risk management offerings, creating what RealPage CEO Steve Winn says is a “win-win” for owners and residents who are engaged in a full-participation renter's insurance program. —C.W.

Q & A What do you think will happen with cap rates in the next six A months?

A: “Cap rates should remain at current levels over the next six to 12 months as the environment for multifamily remains strong. We have seen and should continue to see an unprecedented amount of domestic and foreign capital target U.S. real estate with increasing allocations to multifamily. Interest rates are still at historically low levels, and demographics.” —Jeffrey L. Goldberg, co-managing partner, The Milestone Group

A: “Given how hot the sales market has been over the last couple of years and the general consensus that interest rates are destined to rise, it is hard to imagine that cap rates will do anything other than rise over the near term.” —Jon Segner, president and COO, Dominium Management Services

A: “In the multihousing arena, there is so much liquidity in the system for both investment and financing that I expect cap rates to remain low and possibly even decline a bit for trophy assets in great locations.” —Peter Donovan, senior managing director, Multi-Housing Group, CB Richard Ellis

Pump Up the Volume

Properties offer iPod docking stations.

When residents move in to the Towne Centre at Englewood, they can unpack to tunes blasting from their own iPods thanks to handy built-in docking stations in each unit. “Residents love the docking stations,” says Jeremy Halpern, a vice president for Atlantic Realty Development Corp., which built the 188-unit luxury rental community in New Jersey. “We got a much more excited response than I even thought we would.”

The response shouldn't be too surprising; after all, iPods have quickly become one of America's most beloved gadgets. InfiniSys Electronic Architects, a Daytona Beach, Fla.-based amenity solutions consulting and design firm, offers the docking station for both residential units and common areas such as leasing offices and clubhouses so music can easily be piped through the rooms. “As everybody offers the triple play [telephone, Internet, and TV], we have a lot of owners who are the early adaptors, and they're saying, ‘What's next?'” says Mike Whaling, InfiniSys' business development manager. “This is the next step.”

InfiniSys is installing the product in rentals and condos as either a standard offering or an upgrade option for renters and buyers. The station, which fits into the wall much like a light switch plate, is connected to a home theater system. The equipment (including installation) ranges from $300 to $500, and properties are investing in the gadget for common areas but overall have been slow to install the product in individual units, says Whaling, who expects that to change. “With as much competition as there is out there, they are looking for different ways to leave a lasting impact on a potential prospect,” he adds. An iTunes gift card is a good start.

Price Check

A new site offers a one-stop shop for rent comparisons.

Call it the Expedia.com of the multifamily industry. Rentometer.com, an online tool introduced last fall, shows property owners and managers as well as renters how a community's rents stack up to comparable units in nearby apartment buildings. “More and more people are starting to use the rentometer because it can take you hours or maybe a couple of days to really dig up the all information and do the comparison yourself,” says Allison M. Atsiknoudas, CEO of Investment Instruments Corp., which provides the service.

The Web site's search function is simple. Enter a building's address, the current monthly rent for a specific unit, and the number of units in the building, hit “analyze my property,” and the site generates a comparison of the property's rent compared to nearby units. Next to the rentometer (which resembles a car speedometer), a Google map shows the location of the specified rental unit with the comparable properties highlighted with blue and green markers. Most of this data is derived from listings provided by property owners or from large classified sites like Rent.com, says Atsiknoudas.

The system is easy to use, but it does have its drawbacks. It doesn't take property amenities into account, so a unit in an amenity-rich building may be unfairly compared to a unit in a property with no amenities. Also, it doesn't always offer the specific locations of nearby properties for comparison—but that could be a plus for some property owners.

Confidence Builders

AIMCO's energy team drives the bottom line.

Rob DeGrasse knows all too well the difficulty of integrating sustainability into the typical multifamily executive's business model. “I had to go before senior management to ask for seed money for our energy savings project in 2006,” says the AIMCO senior vice president of service and technical standards. “And by seed money, I mean $5 million. Quite a few jaws dropped to the floor.”

To help gain approval for the pilot program, DeGrasse promised AIMCO brass a 20 percent ROI. By targeting common area lighting retrofits—and, to a lesser extent, central mechanical upgrades and weatherization projects—the newly minted energy team delivered to the tune of 28-plus percent. “That is pure utility cost reduction,” DeGrasse says, noting that there is also the opportunity to boast a larger ROI on the additional service, repair, and maintenance savings.

“We might include those moving forward, but [we] wanted to first establish the program by not including savings that could be seen as less tangible. Migrating to a program like this in a company requires a lot of confidence,” DeGrasse says. “You can't approach the lofty and elusive goals of sustainability without targeting the business side first.”

AIMCO execs apparently were won over, tripling the energy team's 2007 budget to $15 million. “That will likely double again in 2008,” DeGrasse says. Next up for the team: promoting conservation to AIMCO's residents, who themselves spend an estimated $300 million to $400 million on their own energy across AIMCO's portfolio. “We think we can bundle energy conservation with other types of amenities targeted toward our residents that we then integrate with marketing for an incremental rental hike,” says DeGrasse. That program pilots this year.

Cascadia Village Apartments

Vancouver, Wash.

Cascadia Village Apartments looks more like a mountain lodge resort than a typical traditional apartment complex. The 51-unit property in Vancouver, Wash., features green and dark tan exteriors accentuated by wooden planks and triangular roofs. Lush trees in the background give the rental property an even more woodsy appearance.

But what makes Cascadia unique isn't simply its outside elements, but rather its interior offerings that make it suitable for residents of all ages and mobility levels. The Affordable Community Environments Community Development Corp., a Vancouver-based nonprofit developer of sustainable, affordable housing, is known for developing resident-centered, pedestrian-friendly housing with services that facilitate community interaction and personal success. Its goal in building Cascadia Village, using designs from Portland, Ore.-based Carlton Hart Architecture, was to craft a space that residents will enjoy and create a sense of community through design.

The property's interior features include lever handles rather than knobs on all doors, lower-set living room and bedroom windows for visual access for children and persons using wheelchairs, extra-wide doorways and hallways in all ground-floor units, roll-in and step-in showers, ground-floor bathrooms that are oversized to accommodate a wheelchair user, and vinyl or hardwood floors in all ground floor units.

NORTHWEST ESCAPE: Cascadia Village offers energy-efficient living for residents of all mobility levels.

The project also boasts energy-saving elements including whole-house ventilation systems for improved air quality, high-efficiency gas water heaters, and hardi-plank cementitious siding.

Cascadia comprises nine two- and three- story buildings situated around two landscaped courtyards, each with play structures, bike racks, and seating. Each unit has a ground-level porch facing the courtyards, while upper-floor homes also feature spacious front porches and back decks with storage space.

The project was completed in November 2003 at a cost of $3.8 million. The property won a 2004 Excellence in Construction Award from the Associated Builders & Contractors Association and a 2004 Clark County ( Wash.) Community Pride Design Award.