Instant Green Makeover
By Les Shaver
Shortly after completing a record-breaking deal, Pensam puts its stamp on a mammoth Denver community. Here’s why and how the Florida-based owner did it.
When Pensam Capital bought what was then called The Breakers Resort in Denver, the management team knew it needed to move quickly to update the community, which included 1,523 apartment homes and a 26,000-square-foot recreation center.
What followed was a five-month sprint to improve the energy and water efficiency at the community, while also rebranding it as TAVA Waters. Pensam upgraded 2,507 bathrooms with new toilets, faucets and showerheads. Each apartment upgrade also included smart thermostats and bluetooth door locks.
“We began renovations a month after the acquisition,” Pensam Director of Asset Management Eddie Reiner says. “It was a four-month process—it was pretty intense. It was invasive because we had to enter occupied units to make those changes.”
Why the rush?
Part of the impetus came from wanting to make sure that residents were comfortable. “You don’t want to drag your feet and make it any more of a discomfort for tenants than it needs to be,” Reiner says.
But there’s another driver. When a new owner assumes management of a community there’s mystery. And when they’re promising changes, they need to establish credibility (while also communicating the personal intrusions of the construction process, such as water shut-offs).
“By moving quickly, we give the perception that we are doing what we promised,” Reiner says. “The worst thing is when you promise renovations and aren’t able to deliver them in a timely manner. Residents have a short-term mindset. Getting in there in the first six months of ownership and replacing toilets and LEDs, creates goodwill.”
At TAVA Waters, Pensam completed the largest toilet retrofit program in the history of Colorado and it secured the largest water rebate in Denver’s history, according to Reiner.
While Pensam executed the program quickly—which it called its green initiative program—it will take longer to quantify the cost savings. Since residents are making the water payments, Dominic Rechichi, principal of Pensam Development, says they will save money as a result of the upgrades.
Pensam’s acquisition of The Breakers for $350 million was the largest ever in Colorado, according to brokerage firm ARA, and the seventh biggest apartment deal of 2016, according to commercial real estate research firm Real Capital Analytics.
In addition to the green program, Pensam launched an extensive rebranding effort, which included the name change. Meggan Shaw-Butler, Pensam Residential’s Vice President of Asset Management, says the company chose TAVA Waters as homage to the Ute native americans. TAVA was the original name given to what is now known as Pikes Peak by the Ute native americans.
Shaw-Butler said Pensam’s goal was to position amenities as “lifestyle elements” to create demand. “We were careful to appeal to marketing personas [millennials, young families and active retirees] with strategically placed, targeted messaging,” she says.
To compete with other apartment communities in its submarket that offer comparable amenities, Rechichi says TAVA Waters will also spotlight local history through its onsite restaurant. Its menu, part of the overall re-brand, will serve food items named after local explorers and historical figures from the area.