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law states that the pressure exerted by a given gas is pro- not relevant motivating factors for owner-occupied proper-
portional to its density (if the temperature is kept constant) ties (i.e., single-family homes, hospitals, schools, churches,
as the gas is compressed or expanded. In layman’s terms, etc.) is another very big factor for investment real estate
air expands in the water meter costing the owner money. (i.e., apartments, multi-tenant office buildings, hotels, etc.).
By reducing water or operating expenses, those savings
Reducing Cost can flow to the bottom line, increasing NOI.
Everyone likes a deal and no one likes to be that person
who overpaid for something. I’ve never met anyone who Increasing Asset Value
doesn’t want to save money. Whether one is paying the The late, great, Mr. Gerald Hines spoke at Rice Uni-
water bill for his/her home or one is responsible for a large versity a few years ago discussing some of the energy
commercial real estate portfolio, it’s a safe bet one wants to and water conservation initiatives his organization was
reduce costs. This problem (paying for air bubbles in your implementing. A student asked, (I’m paraphrasing.) Are
water) presents an opportunity for any property owner you doing these things to be more ‘green’? He smiled a
who pays the water bill to reduce expenses. These funds little and said some people say this is about being ‘green’.
then obviously become available for other uses. While it is ‘green’, that is not what this is about. Other
people say this is about using fewer utilities/water. While
Increasing NOI that is true, that is not what it is about. Others say it is
Owners of multi-tenant office buildings, apartment proj- about increasing NOI. While that is getting closer, that is
ects, and other investment real estate work hard to increase still not what this is about. This is about increasing asset
their NOI (Net Operating Income) either by increasing value. That is why real estate investors, owners, and
rents or reducing operating costs. In addition to the very managers are in business – to increase asset value.
important benefit of lower water or operating expenses, If a property owner or manager can increase rents or
NOI or Net Operating Income from real estate, although decrease expenses, those dollars flow to the bottom line,

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