Introduction
Equity Residential (EQR) is a leading, publicly traded real estate investment trust (REIT) known for its extensive portfolio of high-quality apartment properties. With ownership of over 300 properties in major cities across in the United States, EQR provides homes for tens of thousands of residents.
Challenge:
Using tax credits to fund new solar energy upgrades on multiple properties
EQR’s sustainability goals include reducing their carbon footprint, decreasing their greenhouse gas emissions, and reaching science-based targets. To achieve these goals, EQR has committed to installing solar panels, where viable, to produce renewable energy on their buildings and ensure that EQR remains at the forefront of sustainable real estate ownership.
In the past, EQR faced challenges around monetizing their tax credits due to the high complexity and transaction costs associated with tax credit transfers. These costs made tax credit transfers for their many smaller projects much less financially viable. Katherine Elliot, AVP of Sustainability, Green Investments, explained, “We had tried to monetize tax credits before, and it was a much larger lift than it is now. Even with strong sustainability, legal, and tax departments, it wasn’t something we had the capacity or appetite to take on. Whether we were building up the needed internal expertise or leveraging outside expertise, the transaction costs could run to six figures, essentially negating the tax benefit and diluting project yields.”
The intricate process and high costs previously blocked EQR from leveraging available tax credits, hindering their ability to enhance their return on their green investments. By partnering with Evergrow, EQR finally found a fast, seamless, and turnkey solution for efficiently monetizing tax credits across multiple projects.
“We wouldn’t have been able to achieve these results without Evergrow. Their turnkey solution and dedicated support made all the difference.” —Katherine Elliot, AVP of Sustainability and Green Investments
Solution:
Evergrow’s all-in-one service for tax credit financing
Evergrow’s all-in-one service made it easy for EQR to finance the tax credits from four separate projects in two different states. After EQR shared their project documents, Evergrow handled all legal documentation, third-party reporting, and tax filing. The Evergrow team processed all these materials, conducted thorough due diligence, and funded the transactions with their capital partners. This comprehensive support not only streamlined the entire tax credit monetization process, but also increased the financial returns for the four solar PV investments EQR made.
Katherine explained, “The process with Evergrow was much more turnkey. After we uploaded the necessary documents, they would immediately review them and let us know if they had what they needed.”
The quick turnaround times and straightforward process made it easy for EQR to stay on track. “It worked well to have that real-time feedback on documentation and next steps,” Katherine added. The efficiency of Evergrow’s platform ensured that EQR could focus on their core sustainability efforts without getting bogged down in administrative tasks.
Evergrow's high-touch service keeps the process on track
Evergrow’s high-touch customer service provided EQR with the support they needed to navigate the complexities of monetizing tax credits. Katherine observed, “Evergrow helped shepherd our team through the process, which was ideal. While there was still a large lift for our tax team on this first transaction, Evergrow was able to guide our team and tax counsel through any hurdles they encountered.”
To expedite the data collection, Evergrow communicated directly with the engineering, procurement, and construction contractors (EPCs), where needed, to gather the necessary information. Katherine highlighted, “Having Evergrow follow up on various outstanding critical items directly improved efficiency and helped us meet our tax credit transfer deadline.”
Conclusion
Evergrow’s turnkey service, flexibility, and high-touch customer service have made them an invaluable partner for EQR. Katherine concluded, “We wouldn’t have been able to achieve these results without Evergrow. Their turnkey solution and dedicated support made all the difference.”
For REITs and other building owners looking to monetize their tax credits with ease and efficiency, Evergrow offers a seamless, all-in-one solution that drives sustainability by simplifying tax credit sales.