investing in your building

january/february 2008 23

industryprofi le

Inve ting in Your Building

by Randy Th rendyle

22 Canadian Apartment Magazine

For building managers, convincing building owners that

they need to spend money on a multi-residential building isn’t

always an easy sales pitch. Especially if the required spending

includes capital expenditures that could easily cost hundreds of

thousands of dollars.

But, for a building to remain attractive and competitive, it

has to meet the needs of both current and future residents. In

many cases that can mean installing a more effi cient heating

system, rebuilding elevators or replacing plumbing fi xtures with

new water saving models.

While some of these repairs are expensive, the payback is re-

duced energy costs and increased tenant satisfaction and com-

fort. Improvements can also keep an older building competitive

with both rental condominiums and other newer rental build-

ings in the area.

For Greenwin Property Management Inc., one of Toronto’s

largest property managers, making the case for capital improve-

ments involves making a detailed business case to the owner of

the building. Th e company manages 16,500 multi-residential

units for a variety of owners. Many buildings in the company’s

portfolio were built in the 1960s and 70s.

As Michael Bolahood, Greenwin’s Chief Executive Offi cer

explains, building owners really have only two choices. Th ey

can continue to spend money to repair outdated systems, or

they can spend the money to bring them up to date. Th at can be

especially true for older heating systems.

In Toronto’s competitive rental market, retaining existing tenants and attracting new ones is often the difference between a profi table building and one that disappoints. For Greenwin Property Management, completing capital improvements is one way to reduce operating costs and maintain high occupancy and satisfaction levels.

industryprofi le

Michael Bolahood Mark Kesseler


Over the past few years the company has upgraded the

heating plants in several of its 200 to 500 unit multi-residential

buildings. Th e buildings were constructed in the 1960s and 70s

and most still had the original heating plant in place.

“After 30 to 40 years they had reached the end of their useful

life,” says Bolahood. “Looking at increasing costs for energy and

effi ciencies in the boiler equipment itself, we decided to com-

pletely retrofi t the heating plant for several of these properties.”

Th at included new boilers, new control systems and new piping

confi gurations.

In order to make a case for the improvements, Greenwin puts

forward a detailed business proposal that explains to the owners

what needs to be replaced and why. Th e number one reason for

replacement is that the existing equipment has reached the end

of its useful life and there’s really no point in pouring any more

money into it.

Secondly, a new heating plant is more effi cient and more re-

liable. It is also better from a tenant comfort standpoint.

Included in the business plan would be a payback period that

would tell the owner how long it will take them to recoup the

money they are spending. “You have to make the business case.

Th ese are very expensive retrofi ts sometimes costing hundreds

of thousands of dollars,” says Bolahood.

Boiler Retrofi t In one building near Yonge and Eglinton in mid-town To-

ronto, the cost of installing new boilers, controls and piping was

$440,000. Th e building had approximately 500 suites heated by

gas-fi red boilers with in-suite hydronic baseboard heaters. In

terms of energy savings, the upgrades reduced the building’s en-

ergy consumption by $126,000 per year. When combined with

Federal energy reduction incentives of $145,000 the payback pe-

riod was only 2.3 years. Th e Federal incentives which were avail-

able at the time of the conversion have now been discontinued.

Th e work involved installing more effi cient boilers, new con-

trol systems and reconfi guring the piping system. Mark Kesseler,

Director of Physical Operations for Greenwin says those are the

key items that will generate savings for building owners.

Kesseler, installed three new mid-effi ciency boilers at the

site in question. Five of the existing boilers were left in place.

Some of the existing boilers had been replaced over the years.

Th e three new boilers have suffi cient capacity to supply the

building’s heating and hot water needs throughout much of the

year. During the winter months, the original boilers operate on

only the coldest days of the year and are isolated from the pri-

mary loop, during milder weather.

Kesseler describes it as a hybrid system, rather than a

complete retrofi t.

In order to increase effi ciency Kesseler redesigned the pip-

ing system. Th e original heating system had four separate loops.

Some boilers were dedicated to domestic hot water, while others

were dedicated to heating specifi c areas of the building.

Th e new piping system connects all the boilers to one sys-

tem. Th at creates redundancy, says Kesseler, as if any boiler

breaks down, any other boiler in the loop can take its place.

New building automation systems (BAS) or direct digital

controls (DDC) also help to increase the system’s effi ciency by

controlling which boilers are on call and which are shut down.

Since all the boilers are on one loop, the control system is able to

turn boilers on and off according to demand in the building.

Since all the boilers are controlled through one primary

loop, the DDC delivers the boiler water to all the ancillary


heating systems of the building. Th e systems include domestic

hot water, suite heating and make up air. Th is control is precise

and eliminates temperature fl uctuations associated with the

older system, resulting in better tenant comfort and supply of

domestic hot water.

Th e new control system also allows the building operator to

optimize the effi ciency of the heating plant and control ancillary

systems such as the suite heating temperature from a central lo-

cation, rather than from inside the suite.

One area where a new control and piping system was able to

generate huge savings was in domestic hot water. Th e original

system heated 9,600 gallons of hot water which was stored

for use by residents. Th e new controls allow for hot water on

demand. Only 400 gallons of hot water is stored. Th e rest is

generated as needed.

“Building automation allows us to oversee the entire building,

so when there is a need, the system starts making hot water. If it

senses a need, it brings another boiler on line,” says Kesseler.

Improved Elevator Performance Elevators were another area where Greenwin clients opted

for upgrades, electing to rebuild almost all the elevators in the

company’s larger-building portfolio.

“Our ongoing resident surveys over the years consistently

listed elevator performance as the primary concern amongst

residents,” says Bolahood. It’s also the most common criticism

of rental agents who fi nd it a diffi cult objection to overcome. Th e

suite and building may show well, but if the elevator is slow, both

prospective and existing tenants may well consider moving on

to another building.

Th e goal in an elevator retrofi t is to bring a 1960s elevator

up to today’s standards. Th at means faster operating times,

faster door times and fewer breakdowns. In a typical major

retrofi t, almost every component except the shaft and the rails

are replaced.

A complete overhaul also reduces elevator downtime as

newer systems are less likely to breakdown and parts are easily

obtained. “Th e last thing you want to hear is that an elevator is

going to be down for a considerable amount of time because a

component is obsolete, no longer in stock or has to be re-built,

says Bolahood.

Modern solid state control systems also provide a much

smoother ride than the older mechanical control systems.

Reduced Electric and Water Bills Other areas where Greenwin has made changes to its port-

folio is in the installation of more effi cient lighting and plumbing

fi xtures.

Fifteen to twenty years ago, says Bolahood, Greenwin

changed many of the original incandescent fi xtures in its

buildings and replaced them with fl uorescent tube lighting.

Today they’ve moved that program to a second phase, replacing

the fl uorescent tube lighting with newer compact fl uorescent

light bulbs.

Th e benefi ts are twofold. Th ere are further energy savings

and in some cases increased light levels in hallways and parking

garages. Kesseler says the price of compact fl uorescent bulbs has

come down over the past few years. Th at’s reduced the typical

payback period to two years.

Th e company is also

encouraging residents to

utilize compact fl uorescent

bulbs inside their suites.

Although there are some

restrictions, the move to

compact fl uorescents is

growing. Some restrictions

are that they can’t be used

in enclosed fi xtures or on

circuits with a dimmer

switch.

An additional area where

Kesseler recommends that

landlords make changes

is in plumbing fi xtures.


Low-fl ow toilets and showerheads use

half the water of older models and will

produce a payback in about two years.

And, most municipalities have incentive

programs that off er cash for replacing

older plumbing fi xtures.

“You can’t ignore your utilities any-

more. It’s such a large portion of your

operating budget,” says Kesseler. “To leave

old lighting and old toilet systems and not

control your HVAC systems is money out

the window.”

Credit Card Payment Offered Off ering diff erent methods of payment

is one more area where Greenwin is fi nd-

ing that landlords have to adapt. While

rental cheques haven’t quite disappeared

from the scene, more and more tenants

are opting to pay the rent electronically,

either through a credit card payment, on-

line banking or using Interac.

Credit card payment off ers conve-

nience to tenants and allows them to

collect loyalty points. However, from the

landlord’s perspective there is a signifi cant

cost as credit card companies charge for

the service.

Despite the additional costs, a number

of owners of Greenwin-managed build-

ings are accepting credit card payments.

Jose Rivera, Greenwin’s Marketing

Manager says the downside of a credit

card payment is that landlords pay a fee

for every transaction incurred. On the

plus side, residents see it as a convenient

method of payment.

It also helps with retention as tenants

use their rent payment as a way to gain

credit card loyalty points. Rivera says if a

tenant is using a credit card to gain points,

they are less likely to move and go back to

using cheques. It can also be a bonus or up

sell to your building since few companies

off er credit card payment, he says.

Rivera says you have to achieve good

penetration levels to make it worthwhile.

“If only two percent of tenants were using

the card, it would not be productive,

but at the 20 to 30 percent range, it’s

worthwhile.” C A M

Giving Back to the Community For the staff and ownership of Greenwin Property Management, giving back to the community is a necessary part of any organization. To do that the company has organized food drives involving Greenwin staff and residents as well as a unique partnership with the Hospital for Sick Children in Toronto. The program offers families a rent-free apartment to live in while their children are in the hospital. The hospital, often referred to as Sick Kids Hospital, is one of Canada’s largest children’s hospitals. As such it often has patients from across Canada. Many of the children are at the hos-pital for several months and while they are in Toronto their parents and other family members need a place to stay. The Al Green family, which owns several buildings in the Greenwin Portfolio, has set aside four apartments for use by families whose children are long-term patients at Sick Kids. The apartments are maintained and furnished by Greenwin staff with help from several Greenwin suppliers such as the Home Depot Supply, Rogers Cable, the Brick and Sleep Country Canada.

To make the apartments more comfortable for families and the children, Doug Geldart, a Greenwin Project Manager, created customized murals for the apartments. The murals help brighten the lives of the children during their stay. The apartments are in buildings that are located along Yonge Street, so they are convenient to the Toronto subway

system and the hospital. The decision on who uses the apartments is made by the hospital and Ronald McDonald House, a charity dedicated to helping children with serious illnesses or disabilities. Since beginning the program two years ago the units have housed many families from all across Canada. In 2006 the initiative won the Federation of Rental-Housing Providers of Ontario (FRPO) award for Outstanding Community Service.

investing in your building

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