We all want to increase rent across our portfolio while reducing the total cost to occupy for tenants. But is that possible? Aren’t rent increases at odds with cost reduction for tenants?

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Here’s the story of how Mike, a VP of Asset Management at PMB Res did it all (and why).

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Mike’s Why: Over the past few years the insurance rates on his buildings had skyrocketed, along with utility costs, and basically everything else he was paying for on behalf of his tenants. His tenants were complaining about the increased costs. 

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Mike’s What: Mike directed one of his site teams to work with Carbon Lighthouse’s engineers, who worked with his contractors to scope out projects that would reduce costs in his building. They did this by upgrading his existing building control system. This wasn’t free. Mike’s total investment was $41,238. 

Mike’s Outcomes: After the upgrades were finished the magic started: 

• Carbon Lighthouse began renting a shoebox worth of space in Mike’s mechanical rooms to install sensors, paying rent of $23,352 per year for a 10yr term. This provided Mike with a 57% Return on Cost.
  • This 57% return was before including any benefits from speed to lease and tenant retention, which are far greater.
• Mike also delivered great value to his tenants: the monitoring service provided by Carbon Lighthouse reduced total costs for tenants by $304,492 over the term of the monitoring service. 

This was a win-win-win: Mike increased his same-store NOI, Mike saved his tenants more than a quarter of a million dollars, and Mike enjoyed improvements in speed to lease and tenant retention. 

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Not bad for a day’s work in a 26,554 square foot outpatient medical facility. 

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Mike is now happily rolling Carbon Lighthouse across the rest of the assets he oversees.