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You want to include a major HVAC renovation in the plan for this year. How do you convince an owner to complete a retrofit that the building needs? You need to demonstrate, first, how the upgrade will improve the building and, second, how this increases the value of the building for the owner.
Some managers may think it is simple to convince an owner to spend thousands of dollars on an upgrade. They assume that an owner will want to complete a project so the building remains state-of-the-art. However, most owners — institutions, for example — view the building as an asset similar to stocks or bonds. They need to see the value of the property increase as a result of their cash outlay.
A second reason commonly given by managers to owners is that the office building will operate more efficiently after the retrofit, thus reducing utility costs. However, tenants usually pay their share of the building’s operating costs based on the amount of space they occupy.
Therefore, the tenants, not the owner, will benefit from the reduced utility costs. The owner pays for the renovation at the time the work is done. The cost of the work is then amortized and passed through to the tenants over the lifetime or payback of the project. The owner will spend the money today and only recoup it over time while the tenants will experience the immediate benefit.
This is the challenge faced by a fictional facility manager we’ll call John Philips, who is responsible for the hypothetical Spencer Building. Built 10 years ago, The Spencer Building is a class A office building in a downtown market. Like many buildings in the marketplace, the 240,000 rentable square foot building is 100 percent occupied with no major leases rolling over for seven to 10 years. Philips is aware that the owner’s objective is to hold this building for at least two to five more years. Although only 10 years old, the building’s HVAC system has two problems. First, the energy management system is not state-of-the-art and does not provide the building with efficient operation and sufficient control. Second, the parts of the mechanical equipment are expensive to maintain.
Philips has recommended upgrading the EMS system and installing variable frequency drives (VFV) on major equipment motors. The upgrade of the EMS system will include new power supplies, bases, transducers, wiring and associated relays. The existing temperature sensors will be replaced and new direct digital controllers will be installed for the interior and exterior air handling units, 24 in all. Static pressure controllers, solar load sensors and control relays will also be added to the EMS, giving the operating engineers more control points to ensure tenant comfort levels and increased monitoring capability. All of the new sensors and relays will be linked by a networking cable in a user-friendly package to a desktop computer with a Pentium microprocessor, graphics card, high-speed modem, color monitor and color printer.