Industry experts are hailing the apartment industry as a bright spot in the housing market, which comes as no surprise, given the recent

hardships experienced by this industry and the public at large.

Apartment communities stay on top by knowing when it’s time to update the buildings. Property owners must be up to date on new regulations, as well as keep communities looking fresh and not outdated.

Stoneham-based Brickpoint Properties Inc. recently undertook a complete renovation of its Burlington community, Beacon Village Apartments, originally constructed in the early 1970s. The three-building, 420-unit community spent around $15 million over a period of four years to completely transform its outdated property.

People who don’t know Beacon Village Apartments was built 40 years ago are surprised to learn it isn’t brand new, said Colleen McAnespie, property manager. Much of the renovations were geared towards the exteriors and redesigning the buildings, she said.

Upgrades included new roofs, fiber cement siding and new windows. Updates were also made to the fireplace, carpeting and furniture in the community’s clubhouse, which is often used by residents to host private functions. One of the community’s older buildings was renovated to include a fitness center for the tenants.

Recycling back in vogueRecycling also played a big role for Beacon Village

Apartments’ renovations. Older materials coming out of construction were scrapped to recycle instead of being sending to the dump. Tenants now also have the option to participate in recycling in addition to traditional trash pickup.

Perhaps the most creative use of recycling came when redesigning the landscaping. Beacon Village Apartments tried to save the mature plantings it had, McAnespie said. New plantings were added, but the community preserved as much of the older plants as it could “as opposed to just throwing them in the dumpster and getting all new.”

Recycling is important to Woburn-based construction firm Tocci Building Cos. as well. The company only works with waste haulers that separate debris and recycle it, said Joseph P. Ferolito, vice president of planning and cost engineering. The company has a 90 percent recycling rate with its own construction waste.

Whether Tocci uses recycled products during construction depends on the owners, said V.J. Tocci, senior project manager. The most popular – and environmentally sensitive – solutions include using linseed oil products for linoleum flooring and using bamboo, a readily replenishable product, he said.

More popular upgrades in multifamily properties include making the heating and cooling capabilities in older buildings more energy efficient, Tocci said.

By Kristin Cantu

UPGRADING IN A DOWN ECONOMYWhen Communities Need More than New Paint

10 BAY STATE APARTMENT OWNER First Quarter 2012

Options include utilizing naturally occurring energy sources for heating and cooling the building, such as implementing solar panels and using geothermic wells.

Roof replacements are at the top of most communities to-do lists, Ferolito said. “All of these properties are getting their roofs replaced, from – more than likely – an old tar and gravel, [or] even an upgraded membrane roof with minimal insulation, to a much more stringent, insulated membrane roof that meets current energy requirements and energy codes.”

BIM brings new light to renovation planningKnowing how to implement renovation ideas efficiently

can be a challenging task, which is why many are turning to building information modeling (BIM), an increasingly popular construction management tool.

“BIM can provide a much more efficient way of working because at the heart of the process, there’s an intelligent model,” said Sarah Hodges, senior industry marketing manager for Autodesk’s architecture, engineering and construction group. “That intelligent model can be used for analysis, for simulation, for visualization and for documentation. It can also be used all the way through construction.”

Autodesk has seen an influx in renovation projects over the last couple of years, Hodges said, particularly due to emerging energy mandates. Building owners have started to be proactive in thinking about how their existing building stock conforms with energy mandates, she said.

Using BIM can help owners figure out their building’s energy consumption. This 3D-model, combined with analysis tools, looks at things such as utility bills, square footage and the orientation of a building.

“You’re able to very quickly prioritize your building stock and see which buildings are performing better than the others and decide which ones will engage in the retrofit and renovation project,” Hodges said.

Upgrades on a full houseThe age of a community also factors in knowing when to

perform an upgrade, said Michael Roberts, vice president of development at Avalon Bay Communities’ Boston office. Minor renovations for a community several years old could include upgrading interiors, kitchen appliances, common areas and a facelift for the exterior.

The next level is typically older generations still in very attractive locations, Roberts said. “We might go in and do something a little bit more intensive – not only upgrade interiors and common areas, but reconfigure a clubhouse in the amenity package.”

While the preference is to get all of the renovations completed at once, it depends on the property, Roberts said. “You want the work to be compressed from a time perspective, and you try to minimize the disruption at the community.”

Beacon Village Apartments was 100 percent occupied during its renovation. “We knew that was going to be

Above: Abbott Mills in Westford, a renovation project of Tocci Building Cos.

First Quarter 2012 BAY STATE APARTMENT OWNER 11

difficult,” McAnespie said. “We met long and hard beforehand. These are people’s homes. How do we go in and disturb them for a number of weeks?”

The solution came by creating packets for the community. Tenants “got plenty of heads up notice and a packet giving them detailed information of what we would be doing and the timeframe that we would be there,” McAnespie said.

“Rarely do you have a situation where it’s a vacant community,” Roberts said about apartment complex renovation. “It is more the rule than the exception that you will have residents living in the community.”

That rare situation did occur when Chestnut Hill Reality invested $13 million into self-managed improvements for Longwood Towers in Brookline. Chestnut Hill Reality purchased the third tower, the failed condominium development Alden Tower, for $18 million in September 2009, said George McHugh, president of property management.

The tower was essentially vacant except for a few residents, who were relocated during renovations. “The unique thing, and the great opportunity, was that by having it completely empty, we were able to basically demolish everything, right out to the exterior wall,” McHugh said. “It allowed us to completely redesign it, renovate it and modernize the entire building just as if it were new construction.”

Everything from hallways and plumbing to electric stacks and floors were removed. The total number of units in Alden Tower was reduced from 98 to 87 to include more attractive layouts, McHugh said. “The most dramatic things we did was moved the kitchen and baths that were on the exterior window walls and moved them to the interior as part of the redesign. It made it a much more open design with fully renovated kitchens, including granite countertops and maple cabinets. We put marble floors in the bathrooms with radiant heat, installed recessed lighting and implemented a large and inviting open space concept.”

“I think, without a doubt, open concepts are much more desirable than hallways and what really is now considered a lot of wasted space,” McHugh added. “There’s a lot more of an open feel in today’s modern design.”

“This really was a unique project. We were able to preserve the building … a great old building,” said McHugh. “It has a lot of history to it,” claiming sport legends Babe Ruth and Joe Louis as previous tenants. “We wanted to preserve that history but also modernize it and reenergize the building.”

What to upgrade – and how to pay for itCreating a new look has become something of

a specialty for Boston-based Beacon Communities Development. The firm often takes on very “tired” properties and renovates them, said Pamela Goodman, president. One such project is Cumberland Homes, a 76-

unit mixed-income community of eight historic buildings, located in Springfield.

“Cumberland Homes could have been lost, because of the extent of the foundation and structural problems,” Goodman said.

Cumberland Home’s extensive historic rehabilitation was completed all at once, mainly due to the severe structural problems. Additionally, it included new energy efficient heating systems, new energy efficient historic windows new roofs, exterior pointing and painting, accessibility improvements, state-of-the-art security system, site work, new bathrooms and kitchens. All lighting fixtures, faucets and appliances met Energy Star standards. The renovation cost approximately $7 million.

None of the renovations on Cumberland Homes, or any other development for that matter, would have occurred if the building owners didn’t believe they could capture the

Above: Building information modeling provides an intelligent model for

project upgrades.

12 BAY STATE APARTMENT OWNER First Quarter 2012

cost back in rent, Goodman said. “You do a lot of work to understand what the market is,” she added.

Understanding the market “all has to do with the price point,” Goodman said. “Who are the residents, and what are they willing to pay for?” While certain upgrades, such as incorporating photovoltaics and other cutting-edge green features, do add to the cost of construction and, despite its rise in popularity, being able to recoup the additional costs through increased rents isn’t guaranteed. “People want energy efficient housing, as long as they’re not paying a lot for it,” Goodman said.

“It’s all about whether it’s of perceived value to the residents,” Roberts said. “If you are completely redoing a kitchen, is that something that would be considered an improvement in the marketplace and therefore demand higher rents? That’s the key to determining the scope of your renovations for any particular community.”

Paying for all of these renovations in a still-recovering economy can be tricky. “I would imagine for those who are out for specific third-party financing for a renovation program … it could be challenging,” Roberts said.

Financing doesn’t come in a one-size-fits-all package. The methods are as diverse as apartment communities.

Funding the renovations on Beacon Village Apartments, the largest co-op in Massachusetts, came in the form of $10 million of excess proceeds from financing and $5 million from capital assessments. Cumberland Homes had loan compositing low-income housing tax credits, city hall funds and state historic tax credits to assist in its renovation funding.

Alden Tower had help in the form of $293,000 in utility rebates, which allowed for the installation of a high efficiency co-generation system that reduces its overall energy usage. The realty firm also credits its “wonderful business relationships within the banking industry” for its multiple sources of funds made available.

Creating good business relationships with the banking industry is “required in today’s business and lending environment,” McHugh said. If you don’t have a good track record, then the door may be closed to you for these types of opportunities. But if you demonstrate time and again to be a good business partner with your lending institutions, there’s more than enough money out there for the right projects.”

Kristin Cantu is a freelance writer.