E-Book, Chapter 9 - The Impact of Replacement Cycles on Renovation Decision Making

Preparing for the Coming 50-Year Renovation Cycle

Risks Ahead

For many facility managers, the risks and costs associated with mid-to old-age (40-60 years old) facilities is a new frontier. Facilities that are reaching 40 to 60 years old are facing a new stage of capital investment that many facility managers are not prepared to address. Hidden systems are often referred to as infrastructure, and include plumbing, electrical, elevators, life-safety, and HVAC distribution systems. Systems, such as these, that are typically hidden in the plenum spaces of walls and ceilings, could be ignored for years. Data shows the average age of facilities in the US is around 50 years old, in life we call that middle age.

Historic Context

Historically, younger facilities are typically managed by replacing individual systems or investing in cosmetic remodeling during the first 40 years. At age 40, to 60, buildings become candidates for major renovations, additions, and structural changes. Previously, hidden systems (described above) as well as key exterior systems such as windows and facades, were previously out of site and out of mind. At 50, hidden distribution systems start to fail, and comprehensive renovations become harder to ignore. Not only are hidden systems due for replacement at this age, but there are also many other risks and costs associated with buildings constructed in the 1970’s and 80’s. The decades in which these older, 50+ year old buildings were constructed were the breeding grounds for experimental building systems that have been tagged “Red Flag” system due to their exceptionally poor performance or their contribution to dangerous building conditions. These red-flag systems include aluminum wiring and faulty electrical panels, polybutene plumbing and some forms of ABS soil lines, sprayed-on or phenolic insulation, initial use of EIFS, (Exterior Insulation Finish System) without proper drainage, as well as several types of problematic wood products such as fire-retardant plywood and T111 plywood siding. The 70’s was also the last decade that environmental contaminants like asbestos and lead-based paint were still widely used. Also, replacing major infrastructure systems triggers issues with code compliance, energy performance requirements, and ADA compliance. Building code compliance typically comes into play when 51% or more of the space is renovated. ADA compliance can be triggered by a requirement to allocate 20% of a renovation budget for ADA upgrades.

To add to the pressure of renovation, many manufacturers have historically stopped making replacement parts around 40 years. In today’s world, that has often changed to 30 years, making maintenance of large-scale equipment like elevators, boilers, chillers, and electrical components difficult without causing excessive down-time while waiting for parts to be fabricated. To further compound the problem associated with buildings 40-60 years of age is the complexity of changes required by code conformance, ADA conformance, energy code and legislation conformance, and changes in cultural uses of buildings and spaces that can make facility space utilization a significant issue.

The purpose of Facility Condition Assessment reporting is to analyze the budgeting and life cycle costs for each decade of use. This is also referred to as capital planning.

Asset Inventory has become the tool by which centralized facility management is managed. Using a centralized maintenance or capital planning software tool can help prepare facility managers and asset managers for the costs and priorities required.

Facilities have a cycle of capital investment that is predictable. The painting and carpeting renewal runs on a 10-year cycle. The remodeling runs on a 15-year cycle. HVAC, roofing, control systems, and pavement follow a 20-year replacement cycle. Doors, windows, and cabinetry follow a 25-to-30-year replacement cycle.

Whatever your age, you can relate to issues of facility aging that are closely aligned with issues of human aging. Each decade has its own set of issues and risks, here is a summary of decade-based risks for facilities:

Risk 1 - Managing the 1st Decade

Years 1-10:

In the first 10 years, building owners are typically lulled to sleep as buildings require little to no significant maintenance. Cosmetic issues such as painting, caulking, or carpeting may be necessary. Many building owners consider selling their buildings at 10-15 years, because maintenance and capital investments begin to increase.

·       Painting

·       Caulking

·       Sealants

·       Carpeting

Risk 2 - Managing the 2nd Decade

Years 10 - 20:

In the second decade, buildings require an increasing amount of maintenance and attention. Building owners are rudely awakened by the need to replace or overhaul costly systems like roof covers, asphalt paved surfaces, cooling equipment, heating equipment, water heaters, and anything with moving parts such as pumps and valves. Remodeling, including painting and flooring is also in need of another replacement cycle.

Risk 1 repeats:

·       Painting, caulking

·       Carpeting

Risk 2:

·       Roofing

·       HVAC

·       Valves and Pumps

·       Pavement Restoration

·       Waterproofing

·       Furnishings

·       Remodeling

Managing the 3rd Decade

Years 20 - 30:

 In the third decade, buildings require more maintenance and investment. Building owners are now forced to consider the first level of building infrastructure replacement, including doors and windows, restrooms, cabinetry, and terminal HVAC units. Control systems for elevators, fire alarm panels, and HVAC equipment typically require replacement in this decade as well. A repeat of cosmetic  painting and flooring occur again, every 10 years. This is a decade of additional remodeling with the added cost of doors and windows. Issues of poor construction may occur due to lack of weep holes, water proofing, or flashing.

Risk 1 repeats:

·       Painting, caulking

·       Carpeting

Risk 3:

·       Doors and Windows

·       Masonry pointing and Waterproofing

·       Cabinetry and Restrooms

Managing The 4th Decade

Years 30 - 40:

 In the fourth decade, buildings require even more maintenance and investment. The risks of the 1st and 2nd decades are revisited with another cycle of roofing, pavement, and HVAC equipment. Remodeling, painting, and flooring are also revisited. ADA conformance is typically missing as ADA design requirements were codified into law  in 1992. If remodeling turns to renovation, ADA conformance may be triggered. 20% of renovation costs for lobbies and restrooms may be required to be set aside for ADA conformance. As larger systems are replaced or structural changes are made, code conformance becomes an increasing issue. Energy performance issues are also increasingly triggered by new codes and legislation.  

Risk 1 repeats:

·       Painting, caulking

·       Carpeting

Risk 2 repeats:

·       Remodeling

·       Roofing

·       HVAC

·       Valves and pumps

Risk 4:

·       Large HVAC Systems

·       ADA, energy, and code conformance

Managing the 5th Decade

Years 40-50:

As buildings age they require a lot more attention and investment. In the 4th and 5th decades, the risk of hidden systems start to emerge for study and maintenance. Plumbing, electrical, elevator, fire alarms, and façade issues start to become more prominent. Major renovations start to become necessary as hidden infrastructure issues start to rear their ugly head. So, in this decade, comprehensive maintenance must be considered. A 2nd cycle of doors and windows and a 4th cycle of remodeling is met with the 1st cycle of renovation. Larger systems such as elevators can cost hundreds of thousands of dollars to replace or overhaul. New technology in the elevator sector can make total replacement more cost effective than a substantial overhaul. Energy efficiency plays a larger role in system replacement than ever before, pushing facility managers to throw in the towel on larger, energy inefficient systems such as water or fire-tube boilers or systems with outdated refrigerants which may have been phased out through legislation due to their negative impact on ozone conditions.

Risk 1 repeats:

·       Painting, carpeting

Risk 2 repeats:

·       Roofing, pavement, HVAC

Risk 5:

·       Renovation with code conformance

·       Ceilings and air distribution

·       Plumbing

·       Electrical and fire life safety

·       Elevator

Managing the 6th Decade

At this age, buildings could be in good condition if they kept up with remodeling and renovation cycles. Some substantial repair or maintenance may be necessary or substantial renovation may be appropriate if renovations or repairs have been delayed over the years. However, if capital investment is delayed too long, the extent of renovations may become too extensive to consider and adaptive reuse or other major changes may be necessary.

On top of the risk of delayed action is the unique set of issues that pertain to buildings constructed in the 1970s that included environmental and red-flag issues. Unfortunately, buildings constructed in the 1970’s were subject to a variety of experimental systems that have become known in the industry as red flags. Lead based paint and asbestos were finally outlawed in 1978 and 1979 but buildings built before this time are subject to the special pains of cleaning up these issues. Plumbing systems such as galvanized and polybutylene were problematic and short lived. Electrical panels manufactured by Federal Pacific and Zinco were destined to fail early. Aluminum wiring was used as an inexpensive alternative to copper but became a fire hazard. Buildings of this age are typically short on fire safety systems and are not adequately braced for wind or seismic activity (depending on the location).

·       Red Flag Issues

·       Environmental Issues

·       Windows and Doors

·       Remodeling

·       Renovation deferred with Code Conformance

Many of us in the Facility Assessment and Management Industry have committed our careers to maintaining, renovating, repurposing, restoring, and remodeling existing buildings. With such a large number of older buildings in the world, there is no end to maintenance and capital renewal.

Facility Condition Assessments are the first step to preparing for and prioritizing your asset management goals. Having consistent and defensible data will help you to plan for and budget for the coming landslide of renovation.  This E-Book attempts to identify and explain the issues related to the coming renovation cycle. In the next chapter, we will conclude this E-book with a look at the current challenges of inflation, capital planning, and cost engineering from an asset management perspective.

For more information on the coming renovation cycle and the impacts of capital planning decision making from multiple perspectives, access the E-book to read more:

1.     The state of US Educational Facilities

2.     Hitting the sweet spot for renovation, restoration, repurposing

3.     The impact of Structure

4.     The impact of Infrastructure

5.     The impact of Energy Codes and Legislation

6.     The impact of Building Codes and ADA Conformance

7.     The impact of Building Envelope Systems

8.     The impact Space Utilization and Education Objectives

9.     The Impact of Replacement, Remodeling, and Renovation cycles

10. The Importance of Capital Planning and Cost Engineering