When developing new projects, real estate companies have historically chosen to demolish and replace existing on-site buildings, preferring to work with a clean slate rather than keep original structures. However, in the face of global climate change, many real estate developers are choosing adaptive reuse, where buildings are renovated, and spaces and materials are repurposed. The U.S. Environmental Protection Agency (EPA) estimates that 600 million tons of construction and demolition debris were generated in the U.S. in 2018, which was the last year it analyzed the country’s waste stream. The EPA also found that demolition represents more than 90% of that total, while construction accounts for less than 10%. Large amounts of materials can be removed from the waste stream by modernizing older buildings. Adaptive reuse also often contributes to urban revitalization efforts, adding to the vibrancy of neighborhoods.
One impressive example of adaptive reuse is The Can Plant Residences in San Antonio, owned by Principal Real Estate Investors and Silver Ventures and managed by Embrey Management Services. The multifamily community opened in 2012 and was fully leased within six months, reflecting the high demand for healthier and more sustainable urban living in this city. The Can Plant Residences was awarded National Green Building Standard (NGBS) Multi-Unit New Construction Silver status in 2013 after third-party inspections affirmed the property’s sustainability credentials. The property continues to model environmental performance in its operational phase, earning the IREM Certified Sustainable Property (CSP) certification in 2018.
History of The Can Plant
The Can Plant Residences is located on a 23-acre site previously owned by the Pearl Brewing Company, which was established in 1883 and was later owned and operated by Pabst Brewing Company. When the brewery closed in 2001, the property was purchased by Silver Ventures, Principal’s current partner on The Can Plant Residences.
Rather than demolish the historic industrial buildings, Silver Ventures redeveloped the site into a live-work-play mixed-use community. Today, the property in its entirety includes the 293-unit Can Plant Residences, the Pearl Farmers Market, the Pearl Amphitheater, Southerleigh Brewery, the Hotel Emma, office space, restaurants, and retail shops.
Apartments feature up to 17-foot ceilings and high-quality finishes, including quartz or granite countertops, stainless steel appliances, hardwood-style flooring, walk-in closets, custom built-in desks and shelving, and private balconies.
Environmental effects have been considered throughout the property’s redevelopment and operations. By maintaining the original buildings rather than building new structures, the developer prevented tons of construction waste and reduced up to 70% of the embodied carbon impacts from the property (see sidebar for additional information on embodied carbon). This approach contributed to the property receiving NGBS Silver status in 2013.
The property maintains its sustainability performance now that it’s occupied and operational. With a continued focus on waste diversion in its operations, The Can Plant offers valet recycling, which has contributed to the property’s 32% waste-diversion rate for the year ending Sept. 30, 2021. Smart home features, such as Nest thermostats throughout 90% of the property, reduce overall energy consumption and can help residents save 10% to 15% on their energy bills, according to Nest. Low-flow water fixtures provide water cost savings for residents and water usage reduction for the property. Upgraded HVAC condensing units, energy-efficient lighting, and ENERGY STAR appliances all help to improve The Can Plant’s energy efficiency. Green leasing clauses allow the management team to monitor the property’s overall energy and water usage for continuous improvement.
These programs and features helped the property earn IREM CSP certification in 2018 and recertify in 2021. CSP certification confirms that The Can Plant has implemented operational policies and protocols to protect the environment and its residents through energy and water efficiency, healthy indoor air quality and amenities, green purchasing requirements, and meaningful recycling efforts.
A focus on health and wellness
The property’s health and wellness features also contributed to its CSP certification and are a big draw to prospective residents. “The Can Plant Residences’ location in the Pearl District gives residents excellent access to some of San Antonio’s best retail and dining options, all in a walkable neighborhood,” says Joe Wanninger, asset manager with Principal.
The property boasts a Walk Score of 72 out of 100, meaning that most errands can be accomplished without using a car, which promotes a healthier lifestyle for residents and reduces carbon emissions. From The Can Plant, residents and visitors can walk to the San Antonio Museum of Art, the San Antonio Riverwalk, and the highly regarded public charter school Hawthorne Academy.
Also supporting resident health and wellness are The Can Plant Residences’ amenities, including a resort-style heated pool, state-of-the-art fitness center with free weights, and bicycle storage. In addition, the landscaped courtyards and resident social lounge offer space for outdoor relaxation and organic social connections, both of which benefit mental health.
Principal Real Estate Investors has long been committed to responsible development and investment, supported by the Pillars of Responsible Property Investing (PRPI), a proprietary environmental, social, and governance (ESG) platform. The Can Plant Residences is a demonstration of this commitment.
PRPI is based on comprehensive policies, strong governance, reporting practices, and research. It focuses on five primary areas of ESG to guide decision-making: environmental performance, occupant experience, community impact, climate resilience, and managerial excellence. PRPI outlines ESG expectations throughout the property lifecycle, starting with an analysis of key ESG factors during the due diligence phase. This continues into operations with an iterative performance improvement cycle. ESG considerations are also incorporated into disposition practices. PRPI helps drive asset management and fiduciary governance as well as deliver positive ESG outcomes and financial results for Principal’s clients and investors.
The Can Plant Residences shows what can be accomplished with a focus on ESG throughout a property’s lifecycle, capturing the history of a neighborhood and city and offering a great living experience to residents.
The property profiled above is shown for illustrative purposes only and is intended to demonstrate the application of Principal Real Estate Investors’ investment strategy and represents a real estate transaction previously entered into by Principal Real Estate Investors. There is no guarantee that Principal Real Estate Investors will enter into any transactions having characteristics similar to those shown. Investing involves risk, including possible loss of principal. Past performance does not guarantee future return. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed. Potential investors should be aware of the risks inherent to owning and investing in real estate, including value fluctuations, market pricing volatility, liquidity risks, leverage, credit risk, occupancy risk and legal risk. Environmental, social and governance responsible investing (ESG) is qualitative and subjective by nature, and there is no guarantee that the criteria utilized, or judgment exercised, will reflect the beliefs or values of any one particular investor. ESG criteria may present additional advantages or risks and does not protect against market risks or volatility. This information is specific to the strategies managed by the individuals providing this content and various investment teams across Principal may have differing views of this approach.