By Christine Miley, LEED AP
From the January/February 2016 Issue
The old adage “you can’t manage what you don’t measure” is particularly true in the built environment. Oftentimes there is a communication disconnect between those responsible for the financial, occupant, and operations aspects of managing a building. One is looking at the bottom line, another is concerned with occupant comfort and productivity, and the other is looking at maintaining the building by keeping the systems functioning. They live in the same country but are not speaking the same language.
Many building owners are not aware of the poor condition of their building systems. As a result they set high expectations with insufficient resources, utilizing historical budgets to meet the needs. And a cycle of deferred maintenance begins. Deferred maintenance directly affects the physical condition of a building, which has a significant impact on the asset value, utility consumption, and occupant satisfaction.
Of these, occupant dissatisfaction, whether it relates to productivity or tenant retention is the most costly. Occupant dissatisfaction is often a result of deferred maintenance, which creates uncomfortable temperatures, excess humidity, drafts, and reductions in visual acuity, excessive noise, or building disrepair. These conditions reduce occupant focus on their mission, reduce productivity, and increase absenteeism. Occupant time is spent complaining, submitting maintenance requests, creating workarounds by importing space heaters, fans, air filters, and task lighting—and when all else fails—call in sick.
What does this means financially? Unresolved occupant dissatisfaction results in reduced productivity, higher tenant turnover, and lower occupancy rates. Looking at the tenant side for example: assume a median salary of $52,000/year with an average office area of 100 square feet per occupant. A 5% productivity loss (two hours per week) would be equal to $2,600/occupant/year or $26/GSF/year. For a 50,000 GSF space with a leasable space efficiency of 80% the loss in productivity has a cost of approximately $1,040,000 per year.
The loss of productivity to the tenant reduces the tenant’s bottom line and makes a strong case for moving. This in turn lowers the building occupancy rate, which lowers the bottom line, which reduces the operating/maintenance budget, and thus reduces the value of the asset.
On the owner side assume $15/GSF/year rent for a 100,000 SF building equal’s $1,500,000 annual revenue plus CAM charges. Losing a tenant that represents 50% of the building occupancy causes the vacancy rate of the building to be significantly less than national average. This action could lower the value of the asset both in terms of desirable space to lease and ability to sell. Lower monthly lease and CAM revenues due to lower occupancy eventually leads to lower budgets for maintenance and repairs.
On the facility maintenance side insufficient budget to maintain building systems leads to “reactive” methods (better known as putting out fires) instead of planned, proactive methods of maintenance and capital equipment replacements. A department in reactive mode is dominated by resolving tenant complaints. Reactive, unplanned maintenance lowers “wrench time”, the actual time spent repairing something, to approximately 25-35%.
The remaining hours in a staff member’s day are spent responding to the work order, testing and observing to determine the problem, searching the store room for parts, if necessary ordering the parts. On a campus with multiple buildings the travel time between buildings can be significant. This 25% to 35% staff utilization and reduced budget does not provide sufficient resources to address planned maintenance which fuels a cycle of deferred maintenance leading to occupant dissatisfaction, which leads to higher vacancy rates, which lead to lower revenue and decreased asset value.
Stemming The Tide: Current Facilities Requirements
Breaking the cycle requires a change in the current model. Utilizing the structure of the commissioning process for existing buildings provides the single thread of communication necessary to address the needs of the financial manager, the occupants, and the operations staff. Existing building commissioning, often referred to as retrocommissioning, typically has a return on investment (ROI) of less than 14 months and significantly helps operations move away from firefighting mode. Ongoing commissioning or monitoring based commissioning provide a continuous ROI by improving O&M staff utilization. Staff utilization is improved by continually providing actionable information that identifies needed repairs before a complaint occurs.
Breaking out of firefighting mode through utilization of the building commissioning process begins with a current facilities requirements (CFR) workshop to identify and document what the building needs to meet its mission. This will be different for each organization. An elementary school has different needs than a college campus. A Class A office building has different needs than a public safety complex. A theater has different needs than an animal research lab.
To begin the thread of communication a CFR workshop is conducted by the commissioning provider using the nominal group technique and includes representation from all divisions of an organization; finance/owners, occupants/department heads, and operations/maintenance staff. This cross section of input provides a CFR report that comprehensively addresses the needs of all stakeholders.
The CFR is critical to the commissioning process as it defines the goals, objectives, and expectations to be met by the process as well as the benchmark requirements to measure success. The report is a “living” document prepared by the commissioning provider and approved by the owner or their representative. It can be changed by the owner or representative any time during the process.
The existing building commissioning process consists of assessment, investigation, implementation, hand-off, and an on-going plan for continuous improvement. These should be broken into two phases. Phase I includes Assess and Investigate.
Phase I: Assess
- Conduct CFR workshop; develop report.
- Collect building information; plans and specs, utility data, work orders, occupant survey results, equipment cut sheets.
- Develop commissioning plan.
- Obtain owner acceptance and decision to proceed.
Phase I: Investigate
- Perform site investigation and testing.
- Review facility documentation.
- Perform issues and opportunities analysis.
- Prioritize by ROI.
- Obtain owner acceptance and decision to proceed.
This phase is the gathering and analysis of data related to the building. An Issues Log or List of Recommendations is generated by the commissioning provider and prioritized according to ROI. The owner/representative uses this log, along with the CFR documenting what is needed, to select the recommendations to be implemented according to available resources. The process then moves on to Phase II, which includes Implement, Hand-Off, and Ongoing Commissioning.
Phase II: Implement
- Select and implement recommendations.
- Implement capital projects.
- Verify completed recommendations and performance.
Phase II: Hand-Off
- Assemble Systems Manual (Commissioning Report).
- Train operations/maintenance staff.
- Conduct lessons learned workshop.
Phase II: Ongoing Commissioning
- Verify achievement of CFR.
- Investigate unacceptable performance or outcome.
- Conduct a follow-up occupant survey.
- Implement recommendations.
- Update Systems Manual (Commissioning Report).
Once the recommended repairs and capital and operational improvements are selected, prioritized, and costed, a budget is allocated and a repair and modification schedule established. After modifications are complete the commissioning provider evaluates the modifications perform in accordance with the CFR. This evaluation compares pre and post utility data, work orders, and occupant satisfaction to determine if the CFR goals were met and to confirm the ROI.
Documentation is gathered throughout commissioning for inclusion in the Systems Manual. The manual begins with the CFR and also contains results of the investigation, a copy of the Issues Log and Resolutions, any calculations or drawings developed during the process, specifications, record of training provided to the operations/maintenance staff, and a comparative result of the occupant survey and number of work orders. The manual contains forms to complete for any modifications made to provide a record for future building changes.
Retrocommissioning helps stop the cycle of deferred maintenance by providing a single thread of communication between those responsible for the operations, occupancy, and finances of a facility.
Miley, LEED AP is co-founder and chief executive officer of Commissioning & Green Building Solutions, Inc. She brings construction and hotel operations experience to this professional consultancy based in Atlanta, GA that provides solutions to achieve high-performing buildings.
To share your thoughts on this topic, please visit the Comments section below.