HOW TO PREDICT THE FUTURE

Can you  accurately estimate the useful life of your rooftop HVAC unit? How about your windows? Your roof? Chiller?  Sanitary waste pipe? Asphalt parking lot?

YES you can.

The Useful Life of an asset or a building component is not simply a measure of how long an item can last. It is a subjective measure affected by multiple factors.  A proper estimate of Useful Life should be regarded as the timeframe during which an asset will perform its originally intended function without material diminution of performance or service, and with only routine maintenance.

Several organizations publish Estimated Useful Life (EUL) tables, which show average useful life measurements for typical building components exposed to ordinary operating conditions.  Among these are Fannie Mae; the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE); and the American Hospital Association (AHA).

A useful life measurement from a published table is only a starting point, however.  It is unlikely any given asset will “expire” in the year estimated by these tables.  Actual useful life will be affected by several location-specific factors.

Harsh environmental conditions can shorten the life of an asset.  In coastal areas, salt spray will shorten the life of any metal in an outdoor environment, especially ferrous metals.  De-icing salt will prematurely deteriorate concrete and asphalt roads and walkways, and will cause exterior metal doors, handrails, and other metal components to corrode. Exterior paint, caulk, and other exterior finish materials exposed to heavy sun (especially on southern exposures) will not last as long as those in milder conditions.  Heavy shade and excessive moisture can also diminish service life of exterior wood components as these conditions tend to promote fungal decay.

Improper installation will reduce service life.  We commonly see residential-style condensing units in multi-family settings installed too close together.  Condensing units need to have clearance around the outside of the metal cabinet to allow for adequate air flow, which is necessary for efficient heat rejection.  Manufacturers typically specify 18 to 24 inches of clearance depending on the application.  If condenser units are installed too close together, they recirculate discharge air, which interferes with efficient heat rejection of all units involved.  The same problem is caused when units are installed too close to an exterior wall or when shrubs are allowed to grow close to the unit obstructing free air flow.  Condensing units operating in these conditions will run longer than intended in order to accomplish the required cooling.  This in turn results in reduced service life, reduced efficiency, increased energy costs, and reduced cooling performance.

Heavier than average use will also lead to a reduced useful life.  Carpet in senior living communities, for instance, can have a wide range of service life.  Primary corridors of Independent Living buildings get a lot of damaging traffic from residents pushing their walkers around and from electric scooters. Carpet in these areas will have a much shorter life than that in administrative offices or other less traveled areas. Excessive foot traffic on a flat roof can cause accelerated granule loss exposing lower layers to damaging UV rays.

Frequent use of plumbing snakes and chemical drain cleaners can deteriorate and damage sanitary waste pipe.  Cast iron pipe is particularly vulnerable, especially after a couple decades of rust has caused thinning of pipe walls.  Eventually, snaking out drain pipe will become impractical and pipe replacement will be necessary.

Maintenance quality has an impact on useful life as well.  Routine filter changes are critical on air handling equipment.  Bearings should be greased, belts changed, and refrigerant fluid levels monitored.  Condensate drains should be kept clear. Condenser water should be treated for proper chemical balance.  Compressor oil should be checked and maintained. Motors and starters should be checked for proper operation.  Failure to perform basic maintenance on appropriate intervals will reduce equipment service life.

Further, emerging technology can render an otherwise useful piece of equipment functionally obsolete, if it can be demonstrated that efficiency, performance, or output can be materially improved by replacing the asset.

Functional obsolescence can also be driven by changing construction standards and building codes, and by changing market demands.

And to make it an even more subjective measure, Useful Life can depend on the owner’s tolerance for repair and the owner’s capacity to absorb catastrophic failure.  Think of your car.  Are you the type to trade in your Mercedes after 24 months because you don’t have time to deal with repairs and maintenance? Or do you continue to replace failed parts on a car that’s so old your children are embarrassed to be seen in it?

It’s time for self examination.

  • Is your maintenance contractor spending several hours a month troubleshooting a 25 year old chiller?
  • Are you spending more and more capital funds cutting into floors and walls to repair ruptured waste pipe?
  • Is excessive money going toward patching your roof?
  • Are you still spending money on fuel oil for that cast iron boiler built in 1920?

If you answered Yes to any of these, the Useful Life of that asset may have expired a long time ago.  Some call this THROWING GOOD MONEY AFTER BAD.  It’s time to develop a plan for capital replacement.

zumBrunnen’s Capital Reserve Analysis involves a thorough evaluation of all capital assets on your campus conducted by our team of seasoned construction professionals.  Using our proprietary budgeting software, we develop a detailed capital replacement forecast where we take into account each asset’s installation date, estimated useful life, and future replacement cost.

zumBrunnen conducts capital budget planning to help clients exercise sound stewardship of their resources . . .to minimize surprises. . . and to free you up to execute your mission.

If you have questions about how to estimate the Useful Life of your capital assets, contact us for more information about how we can help you develop a customized capital replacement plan.

Rob Milam is the CEO of zumBrunnen, Inc. He has 25 years of diverse experience in the construction industry. Rob has worked in multiple market sectors and in all phases of construction management. During his career, Rob has worked on a broad range of facilities including senior living, residential, multi-family, industrial, office, and healthcare.

Leave a Reply

Your email address will not be published. Required fields are marked *

image description