Aging Facilities Part 3: Four Effective Strategies for Modernization
This is the third blog in a series of four that discuss the challenges of aging buildings, including the demands of today’s tenants, the costly consequences of older facilities, modernization strategies, and the resulting benefits.
So far in this series, I’ve taken a look at what tenants expect in the buildings they work, stay, and learn in, as well as how costly maintaining older buildings can be. Now, I want to share some strategies for how building owners can effectively and efficiently modernize their facilities.
I know this is an important concern for building owners. In fact, a recent survey of corporate operations and efficiency decision makers at U.S. companies found that 93% of the respondents felt that infrastructure upgrades and modernization projects were an important priority to their business. And not surprisingly, building modernization projects ranked as one of the top three types of modernization projects that could bring the most impact to their business.
The best path forward…
Building owners like the ones in the above survey recognize the critical nature of updating and protecting their assets, but oftentimes, I find that they don’t know where to start. I typically recommend addressing the costly operational issues of older buildings through a cohesive plan that can turn these facilities into smart intelligent ones. Here is a quick overview of some strategies I recommend for this.
- Strategy #1: Utilize intelligent preventative maintenance and modern diagnostics. Predictive and preventative maintenance is one of the key ways to future-proof buildings. It not only saves costs, but it also extends the life of a building and its systems through the optimization of facility performance. For instance, instead of spending on inefficient repairs with a reactive “wait till it breaks” approach, proactive maintenance, when coupled with building analytics, can reduce a building’s maintenance and energy costs by up to 20%. In addition, surveys show that with a proactive approach, facilities can achieve benefits such as a 10x return on investment; 25-35% reduction in maintenance costs; 70-75% fewer breakdowns; 35-45% reduction in downtime; and 20-25% increase in production. And when facilities managers have the right maintenance and diagnostic tools, they can develop benchmarks, gain better control of their systems, and identify repairs and maintenance requirements before issues reach a critical mass. In addition, building analytics can help pinpoint issues, trends, and averages that help facilities manager prioritize maintenance tasks and actions.
- Strategy #2: Control space utilization more effectively. Technology advancements make it easier building owners to manage space and operations more cost effectively. For example, smart room controllers can replace standard thermostats and easily be connected wirelessly to occupancy and door sensors to track space usage. Space utilization is a big challenge on higher education campuses, especially as e-learning opportunities increase and on-campus populations decrease. Schools recognize that better space allocation can lower operating costs and improve the overall function of a campus. For instance, in the 2012 Inside Higher Ed Survey of College & University Business Officers report, participants identified better management of campus space as part of their top strategies for cost-cutting over the next couple of years.
- Strategy #3: Integrate and connect IT and communication systems more efficiently. In the corporate survey mentioned above, 56% of the participants cite the convergence of information technology and operational technology as the biggest trend impacting their business. Forty-eight percent of the participants believe it will reduce costs, while 43% see it as optimizing processes. A single, intelligent control system communicating through an IP backbone and built upon architecture of open standards can enable energy and operational cost savings. Such a platform can also accommodate future technologies as they emerge without the need for major reconfiguration. Buildings can also be updated with innovative interactive solutions for training, learning, white boarding, and video conferencing, which extends collaboration globally beyond the walls of a facility. In addition, an innovative technology infrastructure provides greater support for building owners and managers. Integrated systems and advanced analytics, along with the automation of processes, streamlined operations, and intelligent use of data is a major step toward building a smart facility.
- Strategy #4: Realize better energy management. ENERGY STAR data shows how commercial buildings, hotels, and campuses can save costs by improving their energy usage. For instance, an ENERGY STAR study of commercial buildings with ongoing benchmarks of energy performance discovered that building owners cut their energy bills by 7% over three years (2.4 percent per year on average). Here’s what this translates into for energy efficient buildings. For a 500,000-square-foot office building, there is a cumulative cost savings of $120,000; this would provide an increase in asset value of over $1 million. For a full-service hotel chain with 100 properties, the cumulative cost savings would be $4.1 million; this would provide an increase in revenue per available room of $1.41. For an 800,000-square-foot school district, the cumulative cost savings of $140,000 would be equivalent to the salary of 1.2 full-time teachers each year.
In the final blog in this series, I will share some success stories which show through real-life examples what the paybacks are for strategies like this.
To learn more about how to modernize aging buildings, read the previous blogs in this series on how tenants are driving modernization and the common challenges of older buildings. Or, to learn more about the strategies discussed here, read this white paper: New Life for Aging Facilities: Four Strategies for Future-Proofing Older Buildings.