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Leave No Stone Unturned Strategically Managing and Leveraging Assets
Hans Kogel, P.Eng, CIHCM Director Asset Management Windsor Essex Community Housing Corporation (CHC)
Regeneration Forum – May 9, 2016
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Regeneration is transformational
Sustainable
Mission, Vision & Strategy Plan
Transformational Change
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Regeneration
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Sound Planning Practices Integrated plan
Who do we need to engage?
What assets do we consider?
STAKEHOLDERS: Community, Residents, Investors, Municipality, Suppliers/Contractors', Energy/Utilities
CORPORATE CULTURE: Capital, Corporate Services, Finance, Operations, CEO
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Regeneration Planning - Time Well Spent Planning
Study
Key elements of Planning: 1. Guiding documents 2. Scope & Objectives 3. Information & Data
Financing & Approvals
Execution 1 year
1 year
Key Elements of Study: • Outcomes • Goals • Process
6 – 10 months
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Study - Required Outcomes Implement strategic plan
Maximize stakeholder value
Optimize equity utilization
Solve asset and program problems
Create strong communities
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Study - Required Outcomes Achieve sustainability
Environmental
Affordability
Financial 20% NOI improvement within
5 year period
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Study – Financial Goal Impact of 20% improvement to Net Operating Income (NOI)
Current
5 Year Period
Total revenue+ $21,400,000 $22,791,000
Total Expenses $38,400,000 $36,480,000
NOI -$17,000,000 -$13,689,000
NOI Improvement $10,200,000 $3,400,000
NOI Improvement/Year $680,000
Revenue Improvement 6.5%
Expense Improvement 5.0%
NOI Improvement Goal -$13,600,000
+ Excluding operating and capital subsidy
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Regeneration Study Process Steps • Subset of data PROCESS DEVELOPMENT
• Mathematical model DATA COLLECTION &
ANALYSIS
• Model optimization & comprehensive data set DATA QUALITY AND
METHODOLOGIES TEST
• Modeling & evaluation MODELING AND OPTIMIZATION
• Reporting REPORTS
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Comprehensive Data Set
Asset Data Set • Asset Data • Energy audits • Designated substance audits • Retrofit funding schedule &
agreements • Official plan, zoning, land use planning • Site planning information & constraints • Characteristic data
Financial Data • Operating financials • EOA data • Encumbrances • Property valuation • Financing
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Complete Development Data Set
Housing Data • Needs assessments and reports • Waiting list • Service level standards • Consultations • Internal reports
Corporate Data • Strategic plan, Vison,
Mission • Tenant surveys • Program agreements • External audits • Shareholder agreement • Internal reports
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Data Management Aged data
Inaccurate data
Incomplete data
Plan to address data quality
Volume
Content
Format
Plan for capturing and transferring data
Data mining resource(s)
Data Quality
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Evaluation Model
1 Create Baseline Model
2. Evaluate Results & ID Target
Development
3. Conduct Development
Investment Analysis
4. Introduce Cost Saving & Revenue
Generating Initiatives
5. Run Model With
New Inputs
6. Evaluation of Results
7. Go to 3. Optimize Further if Needed
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Evaluation Model
1 Create Baseline Model
2. Evaluate Results & ID Target
Development
3. Conduct Development
Investment Analysis
4. Introduce Cost Saving & Revenue
Generating Initiatives
5. Run Model With
New Inputs
6. Evaluation of Results
7. Go to 3. Optimize Further if Needed
1. Asset Data
Revenue Data Expense Data
Qualitative Factors
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Evaluation Model
1 Create Baseline Model
2. Evaluate Results & ID Target
Development
3. Conduct Development
Investment Analysis
4. Introduce Cost Saving & Revenue
Generating Initiatives
5. Run Model With
New Inputs
6. Evaluation of Results
7. Go to 3. Optimize Further if Needed
2. Evaluation Criteria Profitability
FCI Suitability
Mission Impact ( Core Business) Energy Intensity
Designated substance intensity
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Development Evaluation
Index Criteria Rating Weighted Value
1 Operational Profitability 8 32
2 Facility Condition Index (FCI) 7 24.5
3 Suitability 6 24
4 Core Business 9 31.5
5 Energy Intensity 7 21
6 Designated Substance Intensity 8 16
7 Community Impact 9 18
8 Financial Opportunities 8 40
TOTAL 77% 207
123 Sample Street, Anytown, ON
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Development Evaluation
Index Criteria Rating Weighted Value
1 Operational Profitability 2 8
2 Facility Condition Index (FCI) 3 10.5
3 Suitability 4 16
4 Core Business 5 17.5
5 Energy Intensity 1 3
6 Designated Substance Intensity 6 12
7 Community Impact 3 6
8 Financial Opportunities 2 10
TOTAL 31% 83
321 Sample Street, Anytown, ON
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Outcomes - Development Evaluation Ranking of development
1. Preserve – strengthen
2. Renovate – rejuvenate
3. Develop – pioneering
4. Dispose - liquefy asset Tota
l Wei
ghte
d
Val
ue
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Outcomes - Development Evaluation Renovate Capital needs (asset plan) Energy efficiency Program change Improve amenities & services Cost reduction & revenue
increase Functional issues
Preserve Improve sense of
community Cost reduction & revenue
increase Implement mixed use
approach (program change)
Improve services & amenities
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Outcomes - Development Evaluation Dispose Designated substance survey Ready asset for sale Timing
Develop Retrofit Demolish & build new Land acquisition & build new Program Energy efficiency Improve amenities & services Cost reduction & revenue
increase Functional issues
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Evaluation Model
1 Create Baseline Model
2. Evaluate Results & ID Target
Development
3. Conduct Development
Investment Analysis
4. Introduce Cost Saving & Revenue
Generating Initiatives
5. Run Model With
New Inputs
6. Evaluation of Results
7. Go to 3. Optimize Further if Needed
3. Re-development cost data set • Operating and maintenance • Capital repairs • Capital financing • Design & construction • Land and asset acquisition • Demolition, hazardous matl’s
abatement & envir. assessment
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Evaluation Model
1 Create Baseline Model
2. Evaluate Results & ID Target
Development
3. Conduct Development
Investment Analysis
4. Introduce Cost Saving & Revenue
Generating Initiatives
5. Run Model With
New Inputs
6. Evaluation of Results
7. Go to 3. Optimize Further if Needed
4. Define New Programs
Cost saving measures Revenue Generating Actions
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Time Right For Transformational Change
Plan your journey Leverage your resources Astute asset and resource management
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Thank you For more information:
Please contact Hans Kogel,
Director Asset Management [email protected]
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Eval. Criteria Rating Matrix
Feasibility Criteria Analysis & Evaluation
Index Criteria W.F (1 - 5)*
Rating: 0 Least profitable on a NOI / unit basis
5 50% median on a NOI / unit basis
10 Most profitable on a NOI / unit basis
Rating: 0 Area = 10% X 30 years = 300 (Poor condition)
5 Area = 7.5% X 30 years = 225 (Fair condition)
10 Area = 5% X 30 years = 150 (Good condition)
Rating: 0 Significant issues both internal and external to the housing provider
5 Issues exist but a realistic path to resolve is possible
10 No issues both internal and external to the housing provider
Rating: 0 Nothing to do with core business, mission or mandate
5
10 Center of core business, mission or mandate
Rating: 0 high energy intensity
5
10 Low energy intensity
Description and Rating Scheme (0 - 10)
How profitable is the development?
How large is the area under the FCI curve? (Sum of FCI for each year for 30 yrs)
How suitable is the development / site for re-development?
1Operational
profitability4
2Facility Condition
Index (FCI)3.5
What is the proximity to core business, mission or mandate?
What is the energy performance of the asset in kWh/sq m?
Energy intensity 3
This analysis and evaluation criteria matrix is intended to identify how well the current assets are performing relative to the criteria below. If the asset(s)
or development are doing well, then a high score will be achieved. If the assets are performing poorly, a low score will be result. The lower the score,
the "riper" the development is for re-development.
Suitability for
Redevelopment4
4 Core business 3.5
5
3
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Strategic Plan