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SAN DIEGO—Customers are increasingly seeking out places to live that are socially and environmentally responsible, which opens the door for more net-zero development, H.G. Fenton Co.'s president and CEO Mike Neal tells GlobeSt.com. The firm recently upgraded Aquatera, a 254-unit eco-friendly apartment community that opened in 2009 at 5777 Mission Center Rd. here, into a net-zero community with a solar energy installation that allows its residents to get 100% of their energy from the sun. We spoke exclusively with Neal about the challenges to this type of development and the concept of net-zero conversions.

GlobeSt.com: What are the challenges to developing a net-zero community in San Diego?

Neal: San Diego is already a high-barrier-to-entry market with limited development sites remaining. Finding locations with south-facing slopes or enough scale to place photovoltaic panels on buildings or common-area structures can be a challenge. It is, therefore, equally important to re-evaluate existing apartment product for opportunities to add PV, as was the case with our Aquatera community.

GlobeSt.com: How does it work out cost-wise to create projects like these, and what are the benefits to developers?

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Neal: H.G. Fenton Co. is a 109-year-old San Diego-based company with a focus on the future and creating the right lifestyle opportunities for our residents for the next 100 years. We continually evolve what we do based on what is important to our customers. Energy and water efficiency are key parts of the sustainable-lifestyle experience that our customers value. While the expense to build a solar system is offset in part by rebates and tax credits, it is also offset by increased occupancy and higher rental rates. Our payback on this investment is typically three to five years.

GlobeSt.com: Which submarkets of San Diego are most receptive to these types of communities?

Neal: Customers are increasingly seeking out places to live that are socially and environmentally responsible. There is a broad base of customer segments that are socially aware and want to have a positive impact on their environment. The groundswell for eco-friendly developments has moved beyond early adopters to all demographic groups, which in our opinion includes all submarkets in San Diego. Our first net-zero community was Solterra, which opened in 2013. It was built in Scripps Ranch and was 100% leased within 10 weeks of opening.

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GlobeSt.com: Why aren't other developers building or converting net-zero communities?

Neal: As a privately owned company, we don't have layers of bureaucracy or approval processes to get things done. As a 109-year-old company, we also take the long view. We are futurists who look beyond how things have always been done. This allows us the opportunity to innovate, take risks and be early adopters of new technologies. Because we develop and hold our properties long term, we don't have the constraints faced by other real estate models that require the sale of assets on a five-to-seven-year cycle. We are proud of our long-term approach that builds long-term results for the company balanced by lifestyle opportunities where our residents live well, employees flourish and businesses succeed.

GlobeSt.com: What else should our readers know about Aquatera?

Neal: As the second all-solar apartment community in San Diego, Aquatera continues to be innovative and a model for sustainable energy. In addition to its cutting-edge technology, Aquatera has amenity-rich offerings and unique, intimate gathering spaces. Our customers have moved beyond telling us they want to live at Aquatera to they have to live there. You can learn more about Aquatera at http://www.aquatera living.com.