A Building Is Forty Decisions

For each line, an owner has real options. Act now or later. Investigate before committing. Repair rather than replace. Replace like for like or upgrade. Stage the work across years. Combine it with another item. Pass it to a tenant under the lease. Accept the risk and run the element to failure.

The register recommends a course for each, based on evidence and judgement. But the best course depends on things the register cannot know alone: the owner’s plans, hold period, tenants, appetite for disruption and capital availability. That is why bringing the owner’s intentions to bear changes the strategy without changing the building.

Each decision has a clock attached: the period over which an element typically lasts before it needs renewal. Published service lives give a starting point, though not a verdict on any particular building.

Laid side by side, the clocks explain why a building is forty decisions rather than one. A roof membrane, a set of chillers and a fire panel installed in the same year will each want renewal at a different time, and a capital plan that bundles them into one event either spends too early on some or too late on others.

A published life is an average, and averages hide a spread. ASHRAE’s public database illustrates it well. For centrifugal chillers, the units that had actually been replaced had a median life of 25 years, but most units in the sample were still running, so the median for all units could only be stated as more than 25. Survival depends on duty, maintenance and environment.

NBS makes the same point for British practice: life expectancy tables give single figures, while research into component lives shows wide distributions, with most mechanical and electrical components averaging a little over 20 years. That is why the register records each element’s observed condition and evidence, not only its age. A chiller at 26 years with a clean maintenance history is a different decision from one at 18 with repeated failures.

Many decisions depend on others. The roof should usually be renewed before solar goes on. The switchboard may need replacing before heating is electrified. Facade works and window replacement share access equipment, so doing them together saves money. A lift modernisation may wait for a lobby refurbishment. Fire upgrades may be triggered by another project.

A useful exercise is to draw the dependencies between the register’s lines. Roof before solar. Switchboard before electrified heating and charging. Hazardous materials survey before any works that disturb fabric. Facade inspection before facade allowance. Lobby refurbishment and lift modernisation together. Fire upgrades with any major refurbishment. Controls before plant optimisation.

Once drawn, most registers reduce to a handful of chains and a scattering of independent items. The chains are where sequencing creates or destroys value. The independent items can be timed on their own merits. Seeing the shape makes the decisions far easier to discuss with an owner than a list of forty rows.

Decisions also change over time. A tenant announces it will leave. A survey resolves an uncertainty, up or down. A regulation tightens. A chiller performs better than expected. Each new piece of information reopens some decisions and closes others. A register that is updated as this happens remains useful. One that is not becomes a historical document within a year or two.

The most valuable part of capital advice is rarely the first document. It is the ongoing work of making these decisions well: which to make now, which to defer consciously, which to reopen when evidence changes. That is the argument of The Living Record and, in its fullest form, Physical Assets Under Management.

It also suggests a question to ask of any building beyond what it needs: who is making its forty decisions, and how well.