DENVER, CO – Mercy Housing, one of the nation’s largest affordable housing nonprofits, is launching a partnership with Promise Energy, Inc. to increase solar energy use across Mercy Housing’s portfolio. Since affordable housing communities usually operate on thin margins and have limited roof space, they often struggle to implement solar energy programs. Through their partnership, Mercy Housing and Promise Energy intend to show that affordable housing can, and should, be solarized.

The partnership is the first of its kind to prioritize putting solar panels on affordable multifamily properties on such a large scale nationwide. This program involves installing three megawatts (3MW) or more of new solar capacity across Mercy Housing’s portfolio. These installations would provide solar for the equivalent of more than 1,000 units of affordable housing, and reduce emissions by more than 3,000 tons of CO2 each year.

The partnership will use private financing under a solar Power Buy Agreement (PPA) model, which helps defray the upfront cost of installing solar panels. Solar PPAs are financial agreements in which one party (in this case, Promise Energy) pays for the installation and management of solar energy on a property (or properties) at small or no upfront cost to the customer (in this case, Mercy Housing). The customer then pays for the electricity the solar panels generate.

Mercy Housing was able to use a HUD Technical Help grant, as a result of their commitment to the Renew300 program, to develop a detailed Request for Qualifications (RFQ) to find a solar partner. Mercy Housing then conducted a nationwide search for a solar provider with knowledge of affordable housing. Promise Energy was selected for their considerable experience designing and financing solar solutions, and their proven track record of successfully serving multifamily affordable housing portfolios.

“We are delighted that the HUD technical help was used to build capacity for Mercy Housing’s innovative approach.” said Crystal Bergemann, Senior Energy Analyst in the Office of Economic Resilience at HUD. “This partnership is groundbreaking; we are pleased to see a long-term commitment to the solarization of an entire national affordable housing portfolio, showing that solar works for low income communities.”

“This approach allows us to achieve real economies of scale, and stay ahead of changes in rebates, regulations, and technology,” clarified Rood. “What we’ve found in Promise Energy is a dynamic and dedicated partner who is able to both operate at a national scale and dive into the details of each project to come up with the best solution.”

“Mercy Housing is really leading the way here by taking a strategic approach to solarizing its whole portfolio,” said Adam Boucher, CEO and founder of Promise Energy. “Their solar commitment is timely because it reflects the fact that the energy landscape is undergoing an enormous transformation. Relying exclusively on the local utility to provide power is no longer the only option for property managers. Instead, Mercy Housing is developing an integrated energy strategy to reduce consumption and lower energy costs.”

By partnering with Promise Energy, Mercy Housing gains access to a team of experts and the resources needed to make decisions that will significantly improve the long-term performance of its communities. Promise Energy will be conducting property-level energy needs assessments, coordinating and maximizing rebates and incentives, and evaluating a variety of options to bring as much value to Mercy Housing’s projects as possible.

“Today, the choice to go solar needs to be considered in the context of the long-term needs of the property. When our team dives in, we consider the timing of current and future incentives, increasing sustainability requirements, and the lifecycle of each property to determine the best solution,” added Boucher.

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CARROLLTON, TX – Demand for U.S. rental apartments surged during the second quarter of 2016, gaining momentum after a sluggish performance in the first three months of the year. The occupied apartment count across the nation’s 100 largest metros increased by 127,402 units in the second quarter, according to MPF Research, the rental market intelligence division of RealPage, Inc. This is one of the largest quarterly demand totals posted throughout recent years, topping 2015’s second quarter demand volume by 23 percent. Furthermore, apartment demand from April to June well surpassed completions totaling 67,550 units.

“Any concerns that the market couldn’t handle this year’s increase in apartment deliveries appear unfounded for the moment,” according to RealPage chief economist Greg Willett. “As we’ve hit prime leasing season, the greater product availability—brought by sizable new supply—is revealing larger product demand capacity. Initial lease-up for most new additions is registering at a very healthy pace, and we’re managing to squeeze a few more residents into an existing stock that’s been essentially full for quite a while.”

Occupancy Returns to Peak Level

U.S. apartment occupancy inched up to 96.2 percent in the second quarter, regaining the bit of ground lost in late 2015 and early 2016. Current occupancy matches this economic cycle’s previous peak rate seen in the third quarter of last year. The only time occupancy has been tighter was at the height of the tech boom in 2000 and early 2001.

“Occupancy remains stronger than the norm during past periods of substantial construction,” Willett said. “The fact that few young adults are opting for home buys right now is helping the occupancy performance. Economic growth is bringing new renters in through the front door. At the same time, the number of existing residents exiting out the back for other housing options is limited.”

Rent Growth Remains Robust

Typical rents for new residents climbed another 1.8 percent during the second quarter, taking the price increase seen over the past 12 months to 4.6 percent. Monthly rents for new resident leases now average at $1,282.

Influenced by the increased volume of new supply that apartment owners and operators have in the initial leasing stage, average annual rent growth has slowed modestly from this economic cycle’s peak growth of 5.6 percent, seen in the third quarter of 2015. But, today’s annual rent growth pace is still very substantial compared to the long-term historical norm that runs just under 3 percent.

“Annual rent growth in the range of 4 to 5 percent is an unprecedented result six years into a growth cycle,” Willett commented. Annual rent change has been positive for 24 consecutive quarters, with the average price increase during that period registering at 3.8 percent. For comparison, the mid-2000s growth cycle lasted for 19 quarters, and annual rent growth averaged 2.8 percent in that span.

Among individual large metros, Sacramento is now the country’s rent growth leader for the first time ever. Pricing for new-resident leases in Sacramento climbed 9.7 percent during the past year. The following list shows current top performing metros for annual rent growth

Select Metros Losing Steam

While annual rent growth remains near this cycle’s peak levels in most metros, pricing power is cooling meaningfully in a handful of spots. After San Francisco, Oakland and San Jose metros, experienced huge rent growth for several years, the size of price increases is coming back to levels that appear more realistically sustainable now that the region’s building activity has climbed to record volumes. Similarly, a substantial amount of new product additions have slowed Denver-Boulder’s annual rent growth pace, after record price increases occurred earlier in this economic cycle.

Importantly, the Bay Area metros and Denver-Boulder are posting strong apartment demand. Increased deliveries haven’t resulted in vacancy issues. Thus, while rent growth has slowed from the very robust levels achieved recently, price increases are still strong relative to the long-term norm.

In contrast, Houston’s current pricing is weak, not just a slowdown from previous results. Rent growth is close to disappearing due to slowing economic growth occurring alongside aggressive apartment construction. In fact, actual price cuts have emerged in several of the neighborhoods adding the most supply.

Peak Deliveries Lie Just Ahead

A recent slowdown in the number of multifamily housing units authorized by building permits suggests that the apartment construction volume should soon cool slightly. For now, but, ongoing building remains in line with the very high levels posted over the past year or two. Properties totaling 534,743 units are under construction in the nation’s 100 largest metros.

“With so much additional product finishing very quickly, the apartment leasing environment could become more competitive in the small-term,” according to Willett. “A large block of new supply is scheduled to end, just as demand registers its routine seasonal slowdown in the winter months. But, barring a pronounced stumble in economic growth, there’s nothing suggesting future stock is going to cause huge-picture problems.”

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ANAHEIM, CA – JPI, a leader in the development of Class A multi-family housing, received unanimous approval from Anaheim’s Mayor and City Council for Jefferson Stadium Park, a 17.6-acre prime real estate site located in the prestigious Platinum Triangle in Anaheim, California – directly adjacent to Angel Stadium of Anaheim, on the southwest corner of State College Boulevard and Gene Autry Way.

A $364 million development, scheduled to break ground in December 2016, Jefferson Stadium Park is a 1079-unit luxury apartment community, which includes a 1.1-acre public park, and 14,600 sf of community-oriented retail space.

“Jefferson Stadium Park is representative of the ideals of Anaheim’s Platinum Triangle, embodying the highest level of architectural features centered around an environment that encourages community engagement and activation of key boulevards in the Triangle,” said Anaheim Mayor Tom Tait.

Residents of Jefferson Stadium Park will have access to Anaheim’s Regional Transportation Intermodal Center (ARTIC), as well as year-round entertainment, including Major League Baseball’s Los Angeles Angels of Anaheim, and the National Hockey League’s Anaheim Ducks. The development is just one mile away from the Downtown Disney Shopping District, Disneyland and California Adventure theme parks. Also nearby is the public marketplace of the Anaheim Packing District.

This is the second project for JPI in Anaheim’s Platinum Triangle. Currently under construction is the $120 million Jefferson Platinum Triangle, a 400-unit luxury apartment community located near the intersection of State College Blvd., and Katella Avenue, scheduled for occupancy in Fall of 2017.

“Jefferson Stadium Park represents an additional $364 million investment that JPI has committed to Anaheim,” said Heidi Mather, Senior Vice President and Development Partner. “Anaheim’s Platinum Triangle is a model for development efforts that encourage new projects, enhancing quality living experiences for the community. This new project only strengthens our commitment to be a part of the revitalization of this core area of Anaheim.”

JPI’s Western Regional Division is based in San Diego, and has developed 15 luxury apartment communities throughout California totaling over 5,800 units. Additionally, the western division just announced the closing of two development projects in Arizona: Jefferson Town Lake – a $57 million project which broke ground earlier this month; and Jefferson Chandler, a $50 million project anticipated to close in July, and scheduled to break ground later this summer.

“JPI’s foundation is its commitment to building world-class apartment homes that contribute to the fabric and economy of local communities,” said Todd Bowden, Managing Development Partner of JPI’s Western Region. “Southern California, in particular, is a key market focus for JPI. Our development work with the City of Anaheim has been an exceptional experience.”

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