“We just saved our client $303,000 on their Affordable Housing Portfolio with our
Free Energy Audit”

The U.S. multifamily market saw an unprecedented amount of transactions this past year with buyers and lenders hoping to cash in on the combination of the sector’s reliable cash flow and rising rents. This has led to investors paying more for properties and accepting lower expectations on their returns. Some of that has been offset by surging rents which, in turn, has been countered by rising costs in both construction as well as energy prices. For new development deals, especially affordable ones, these factors are making the financing math a bit tricky and difficult to pencil. In talking to several affordable housing developers, many are unsure around their sources of financing as well as the rising construction costs. We have also been telling some affordable housing developers to temper their expectations as it relates to their utility allowances in the coming year as energy prices are rising and many utility companies are playing catch up. This will serve to further compress capitalization rates in what is already a very tight market.
All of this is not to say that affordable housing developers should be resigned to the reality of lower returns this coming year. There is hope and it comes in the way of the utility allowance. We just performed an “audit” for one of our clients on four of their buildings totaling 608 units. The buildings were all built after 2017 to high standards as it relates to efficiency. When compared against the Public Housing Authorities’ allowances, the results were staggering. We will have saved this owner approximately $303,000 in additional net operating income in the form of higher rents over the course of the upcoming year.
In development it’s clear that several factors are out of our control. Rising construction costs and energy prices being two of them. If you are a building owner, now might be a good time to reach out to us and see how these increases will affect your buildings especially as they relate to the utility allowances. Please contact us and we can assist you in making some strategic decisions now that will pay dividends going forward into 2022.



Walter Mendoza - Managing Partner
Rate Watch -Utility Providers Raise Rates
Pepco DC, MD and Dominion all raise their rates.
As predicted, many utility providers have raised their rates to keep up with the rising cost of energy. Historically, these providers would raise rates in Jan/Feb and in April in the case of Dominion. Many were caught off guard when they decided to raise rates this fall and in the case of Pepco, 2x since. We are seeing increases as high as 13%. This will serve to compress capitalization rates even further. Please reach out and we work together to see what this means for your forecast this coming year.
376 Units in Washington DC
On this particular property, we were able to save the owner an additional $20,866 in Net Operating Income over the previous year.
200 Units in Chevy Chase, MD
On this particular property, we were able to save the owner an additional $36,205 in Net Operating Income over the previous year.
750 Units in Washington, DC
On this particular property, we were able to save the owner an additional over $300,000 in Net Operating Income over the DC Housing Authority's Utility Allowance.

11010 Brent Road 
Potomac, MD 20854
(301) 706-3321