What’s this building going to cost me?
Hypothetical scenario: Owner comes to architect and asks for a new building to suit his/her emerging business needs. Architect asks what the budget and effective shelf life will be. Owner provides a budget maximum with a wish list of amenities. Architect begins designing. Subsequent budget issues necessitate the dreaded editing process. Project gets completed on budget and involved parties go their separate ways.
Sound familiar? Initial investment, including soft and hard costs, typically dominates the project dialogue between owner and consultant. And yet, how often are questions asked about what will the accumulated costs be over, say, a 30-year period?
A Life Cycle Cost Analysis is a way to track the total cost of facility ownership. A little-known statistic is that when analyzed over a 30-year period, less than 10 percent of total costs relate to design, construction and other startup costs. The rest during that timeframe is for maintenance and personnel. Let that percentage sink in for a moment.
A revisionist retelling of this story could be during the editing process:
- Owner: We need to save $500,000. The exterior glazing seems expensive.
- Architect: The glass is low E high performance, which allows maximum views while cutting out the glare and heat gain during ¾ of the year.
- Owner: Why does that matter to me?
- Architect: Because going to a lesser grade glass will allow more heat in, raising your cooling bill by 20 percent and you will have to replace blinds, carpet and furniture earlier due to UV degradation. Additionally, eye strain on your employees will cause a rise in absenteeism. All in all, the $500,000 initial savings will cost you $1.5 million over your ownership period.
Storytelling aside, it should be through a long lens that business decisions should be made when developing facility goals. A low-cost HVAC system will end up costing more in the long run. The same holds true for other systems and components. An emerging trend for urban cities is to require commercial buildings to release historical utility costs in a real estate transaction. If your building is energy intensive, it will ultimately affect the resale value. This trend will only continue and will factor in carbon footprint determinations expected in the near future.
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