Building Envelopes

From Cradle to Grave: The Cost of a Building

• By Harold Stephens, Whitney Cabaza
• 03/01/20

At a certain point in the life span of a building, owners will inevitably be faced with deciding whether to repair critical infrastructure systems or replace the building in its entirety. This brings into question — when a system shows signs of failing, what is the most cost-effective course of action an owner should take? Does the owner replace the system or close the facility?

Critical infrastructure systems include the building’s mechanical, electrical, plumbing and envelope systems. These systems are expensive and critical to not only the operational comfort of an enclosed space, but for optimal building performance. Both local and federal codes require building owners to construct buildings per regulations specific to the geographical area. It is no surprise educational spaces can directly impact student success and achievement; therefore, owners are highly motivated to seek maximum efficiency when selecting a mechanical system. New plumbing systems now include sustainable design and the preferred new electrical systems are inclusive of building automation and controls. The building envelope and roof systems are pertinent to selecting the most cost effective and sustainable materials to keep the outside rain, wind, snow and heat from penetrating the building membrane while designing a welcoming exterior entrance. However, considering approximately a quarter of a school district’s buildings are new construction and the remaining 75 percent are existing facilities, owners must effectively and efficiently track these critical infrastructural systems’ lifecycles.

Building owners are encouraged to track system lifecycles by simply establishing a long-term, sustainable and holistic building asset management program. Building asset management is a multi-disciplinary approach to the long-term stewardship and management of building systems to maximize their lifecycle value and benefit to the owner, occupants and community. An owner’s asset management program will provide detailed insight to associated system costs. "Keep up" costs include annual maintenance, critical component renewal and replacement costs; and "get ahead" costs include costs associated with upgrades and retrofits improving the building design, functionality and efficiency. Once the "keep up" costs and "get ahead" costs become more than the replacement value of the building itself, an owner needs to make the decision to either continue repairing or demolish and rebuild.

A building owner determines the district or university’s "get ahead" costs by performing capacity studies and monitoring community growth. These costs are imperative for owners to monitor since they can be extremely high and require public funding through bond propositions. An owner determines the "keep up" costs through their building asset management program by conducting condition assessments for each facility. Owner personnel, consultants, engineers and representatives evaluate each building’s infrastructural systems per discipline. The condition assessment identifies critical building components in need of replacement or repair, as well as record any preventative maintenance or items currently under warranty.

All major critical infrastructural systems are documented and recorded as such: description of replacement or repair, current replacement or repair priority, estimated year of replacement or repair, and replacement or repair cost associated. Replacement or repair priority can be on a 1 – 4 life expectancy scale with Priority 1 having 1 – 3 years of life expectancy remaining, Priority 2 is 3 – 5 years, Priority 3 is 5 – 10 years and Priority 4 is more than 10 years. Prioritizing these costs provides the building owner and maintenance personnel easy to digest data for what needs to be corrected now, versus what can wait. The owner can also decide to add a Priority M for any items which can be covered by the facility maintenance personnel. The replacement or repair costs associated to each building assessment is then incorporated into a Facility Condition Index (FCI).

FACILITY CONDITION INDEX - EXAMPLE The Facility Condition Index (FCI) is used throughout the facility condition assessment industry as a general indicator of a buildings health. The FCI is calculated by dividing the Facility Condition Repair Cost by the Replacement Value. As a general rule, an FCI of 10% or less is considered Excellent, 11%-30% is Very Good, 31%-45% is Good, 46%-59% is Average and 60% or more is considered Poor.
	PRIORITY TOTAL	LIFE EXPECTANCY
Priority 1 Total	$8,566,800.00	100.00%	$8,566,800.00
Priority 2 Total	$10,857,193.60	100.00%	$10,857,193.60
Priority 3 Total	$4,213,437.60	75.00%	$3,160,078.20
Priority 4 Total	$416,400.00	50.00%	$208,200.00
FACILITY CONDITION REPAIR COST (SUM OF (PRIORITY TOTAL x LIFE EXPECTANCY)):			$22,792,271.80
FACILITY REPLACEMENT VALUE (SQ. FT X REPLACEMENT COST + SOFT COSTS):			$36,290,582.00
FACILITY CONDITION INDEX			63%

Each building receives an FCI value which is a snapshot of the building’s health. An FCI is a comparative industry indicator used to calculate the relative physical condition of the building and expressed as a ratio of the cost of remedying existing deficiencies to the current replacement value. As a rule of thumb, an FCI of 10 percent or less is considered "Excellent" current building condition. An FCI of 60 percent or more is considered "Poor" current building condition and replacing the building in its entirety may be the best valued option for the building owner. The FCI is a convenient tool for building owners to utilize to their advantage when funding is limited.

Beginning to devise an asset management program for all critical infrastructures is a massive endeavor and requires consultants from multiple disciplines. So, it’s no surprise this may seem overwhelming for any building owner, especially when responsible for several publicly funded buildings. It is our professional recommendation, as a Building Envelope Asset Manager Professional, to start from the outside of the building and work inward. First, an owner’s maintenance and operations department should start with developing a building envelope asset management program. Consult a building envelope consultant for additional assistance and the consultant will perform a condition assessment including verification of all roof and envelope penetrations, current state of the roof systems, window and door sealant quality, as well as air and vapor barrier integrity. If your consultant is part of a multi-disciplinary architectural and engineering firm, then it may be beneficial to include a MEP consultant when examining the roof. Since mechanical units and plumbing penetrations are located on most roofs, fill two needs with one deed, right? Once the owner’s envelope consultant establishes the current condition, the documentation is produced and given to the owner to integrate into their current maintenance database or will be the foundation for the owner’s asset management program. By beginning with the building envelope, then moving to other critical infrastructures, it is a great way to begin your asset management program and aid with breaking out the huge endeavor into manageable tasks.

From the cradle of your building throughout its lifetime, every building owner is encouraged to maintain an asset management program. By staying vigilant and proactive with your building’s health, owners can stay ahead of costly repairs and replacements. However, once these costs outweigh the replacement cost of the building, owners are faced with a tough decision regarding the fate of the building. An owner’s asset management program should act as a crystal ball to your building’s future, and if managed correctly, your building will live a long and healthy life.

This article originally appeared in the March/April 2020 issue of Spaces4Learning.