In a disposition market that has many apartment owners considering the shift from buyer to seller, Irvine, Calif.-based utility management firm NWP says the ability of utility business analytics to improve asset value shouldn’t be overlooked by portfolio managers seeking to boost NOI and improve sale prices. Unveiled last week at the National Apartment Association Education Conference & Exposition, NWP’s business intelligence and analytics benchmarking feature of the firm’s UtilitySmart suite of services aims to do just that—compare utility spend like any other comp against a database of peer properties and hard target high ROI areas for improvement.
"Lower utility spend, improve net operating income, and, at the end of the day, improve the value of the asset—that’s what we are keenly focused on helping apartment operators achieve," says NWP director of product management Mark Gentile.
The utility benchmarking feature from NWP compares an asset’s utility rate and consumption patterns against the firm’s database of 1,200 properties and three million-plus utility invoices over a trailing four-year period, says company senior vice president of product management and engineering Jim Charles. "The marketplace for the last 10 years has been all about recovery: Take the invoice, process it, bill it back, and try to help the client achieve 100 percent recovery of those expenses," Charles says. "Where it has not been focused is how do you take that information, create action items, and create a return on investment on what is the second or third largest expense at a property."
Properties that elect for the benchmarking can do a comparative analysis of current utility spend as well as cap rate modeling at the national, regional, and state level to identify how cap-ex devoted to utility projects might improve overall asset value. Beyond rate and tariff improvements, potential areas of savings identified by the service could include waste removal cost improvements, better water or electrical conservation, or the replacement of antiquated, damaged, or inefficient equipment and fixtures.
NWP isn’t the only multifamily utilities management firm rolling out enhanced functionality. Fresh Meadows, New York-based U.S. Energy Group has launched alert upgrades to the firm’s USE Manager online monitoring and building control system, specifically notifying asset managers when residents initiate service complaints with the New York City Department of Housing Preservation and Development (HPD). "Owners and managers are often concerned a resident will complain to HPD first, before even mentioning the issue to the super or management company," says company CEO Jerry Pindus. "We wanted to provide a way for building managers to know about these before HPD gets involved or sends an inspector, so they have greater peace of mind and are able to address issues before they become problems."
In addition to alert upgrades to USE Manager, U.S. Energy Group has also optimized its system for access through the USE Mobile iPhone application.