Hello all!

We are looking into building a new apartment complex - 200 units or so, so I am researching into every possible idea into how we can build this complex in a way that reduces ongoing operational costs, reduces the number of staff required to operate the property, and also reduces maintenance costs by helping us predict issues. We have several ideas in mind already, but are excited to brainstorm some new ones as well.  Any ideas would be greatly appreciated! 

I am very naive to construction methods to please forgive my ignorance there. Thanks in advance for the help! 

@Ben Groonwald this is going to come in the form of technology for the most part in regards to operations from the PM side. Theres lots of info and products out there addressing this topic.

There are some things you can do in terms of efficiency of design in the building and the site planning to minimize maintenance and utility costs. This will be on the Architects and engineers. There are some firms that specialize in this area of multifamily.  Make sure to choose an architect and GC that are familiar with these issues as well as maintenance free building products and building systems including things like longer lasting lightbulbs, HVAC filters, building products etc. Not all architects, engineers and builders are equal in their knowledge of this area.

@Greg Dickerson That is great info and advice. Thank you Greg! I'll be sure to continue my research into different technologies and continue to reach out to different architects. 

Ben Groonwald

There's an endless list of areas to reduce long-term maintenance.  Each with different cost implications. Some things that come to mind that may not add too much to material costs and likely reduce long-term costs are:

-One piece tub and shower units (they can be cheaper than sectional units and you can usually get them into a new build).

-High quality bathroom paint with mold inhibitors

-carpet tile or LVT (luxury vinyl tile) with releasable glues so that a single tile can be replaced easily.

-Toilets that don't clog easily (I like Toto)

-A single heating system with submetering or heating added into the rents can be more affordable than maintaining independent systems (be warned though that you may have to administer the bills with submeters which is definitely a time consumer)  Electric baseboard heat can require no maintenance for several years (but is typically more expensive to operate depending on energy costs).  You may want to consider heat pumps and their maintenance requirements (I don't have a lot of info. on these but plan to look at them soon).

-Get faucets that are known to be reliable and easy to repair (parts are common and readily available).

Hi Ben,

Congratulations on your entry into the world of RE development. I am developing a 140 unit MF project in Colorado that is focused on producing as many affordable (entry level / workforce) units as possible. As much as possible, Project design will include; passive and active solar, ground source heat pumps and water catchment / recycling. These factors are part of defining affordability in terms of operational costs.

Reducing Op Ex should start with Project Design, which should include a deep dive into running a cost benefit analysis on energy efficiency for the items noted above including considerations for the building envelope, insulation, window/door package, framing and lighting and water consumption.

Actually attaining any or all the of the goals noted above generally comes at a cost that typically falls on the developer which sets up an interesting conundrum for the developer. The challenge being that the developer needs to be okay with increasing development costs that will mainly benefit the Project residents. An argument can be made that these efficiency upgrades will give the Project a marketing "edge" over competition that does not have them and therefore benefit the developer in reduced vacancy and a possible bump in rent rates. While the ability to realize the benefits of the "edge" is debatable and can only be known "after the fact", the developer's increased costs are solid and known from day 1.

The developer's challenge in selecting what is in and what is out of the Project design that defines first cost and Op Ex is to make sure that these elective issues have been thought out and know that they were made by applying as much thought and analysis as possible.

Hi Ben,

These things depend on the demographic of your intended tenant base.

There are a TON of things.

Certain tenant bases tend to cost less with upgraded front door handles on their units and auto-closers on the doors and etc, etc, etc... (and a certain management style), others demographics do better with other things....

It depends on your tenant base.

Good Luck!

Ben. Will be following you as you build your new 200 units.

Do not have much experience to offer in this field yet as I built my new 20 units this year. Lots to learn.

Good Luck