When your portfolio comprises over 300 multifamily properties, supporting energy efficient, environmentally friendly operations can be a mammoth task. That’s the challenge that faces multifamily REIT Equity Residential (NYSE: EQR), whose portfolio spans more than 84,000 apartments.
“One of our top priorities has been to operate our portfolio as efficiently as possible with the systems and equipment we have in place,” says Kyle Hendricks, Equity Residential’s vice president of sustainability and green investment.
“Over the last couple years, we’ve demonstrated that it’s possible to make significant progress toward our energy and emissions goals at little to no cost. This has the double benefit of being both a sustainability and cost reduction initiative,” he says.
Equity Residential was recognized as Nareit’s 2024 Leader in the Light Award for the residential sector. It’s the REIT’s fourth time being recognized as part of the Awards, which honor REITs that demonstrate leadership in sustainable and socially responsible investment and operating practices, good governance, and transparency.
Since Equity Residential employs a “small but strong” energy management team, Hendricks says, a key hurdle was in creating a efficiency program that “would drive impact at scale.”
“Essentially, we had to focus on ways to empower our colleagues that work at our properties to identify opportunities and take action,” Hendricks says.
Start with small wins
Equity Residential energy management team drives efficiency at scale by supplying easily digestible, up-to-date information to guide on-site decisions about energy matters.
The energy team provides efficiency basics guidance based on experience with past project success, starting by identifying small wins that could serve as a proof of concept. Equipped with nearly real-time data, on-site team members would identify problems and then devise solutions, assess direct savings, and develop guidance that could be applied to common systems or property types.
“We’ve found measurable results to be a powerful motivator. Being able to clearly point to successful outcomes after taking action makes the case for developing a play-book to roll out more broadly,” he says.
A common issue in residential properties involves hot water valves installed in many of the kitchens and bathrooms, which not only control hot water for apartment kitchens and bathrooms but in some cases are part of the overall heating systems for apartments.
“When these valves begin to fail, the quick fix is to set them fully open, causing the systems to be very inefficient,” he says. “We’ve developed a playbook to help our on-site teams identify when this might be an issue and specific steps to implement a fix that maintains occupant comfort and operates efficiently.”
For any measure that the energy management team develops guidance for unit-level data, where available, is used to show the immediate impact of changes. At properties where issues may be more widespread, building-level data from utilities also provide insights.
Data available at every level
Looking ahead, Hendricks envisions data driving “continuous improvement and scale” in Equity Residential’s approach to energy management. The REIT is targeting a 20% reduction in energy usage by 2030 compared with the 2018 baseline and a 10% reduction in water usage by 2030 compared with the 2018 baseline.
“Our ideal state is an environment where everyone at every level has the necessary data to quickly gain insights and take action,” Hendricks says. “We’re working closely with our facilities management teams to understand their daily priorities and how energy management can be seamlessly integrated into existing processes.”
Moving forward, Equity Residential sees sustainability continuing to transform from a business add-on to a priority that’s woven into the REIT’s culture. “I see an opportunity for us to measurably demonstrate how sustainable real estate is valuable and profitable,” he says. “Sustainability and climate issues are becoming increasingly important to both our residents and investors. Telling a good story is nice; showing real progress is better.”
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Equity Residential was among four REITs named to both the Dow Jones Sustainability World and North America Indices.
REITs, including Equity Residential, from a range of property sectors were named to TIME’s list of the world’s most sustainable companies for 2024.