The worst case scenario is getting a PCA back from a specialist only to find that they recommend that you update or completely replace an old system. The estimated costs for replacing a major system may deter a potential purchaser from buying the building.
That said, the realization that there is a major system replacement that needs to be done can be a great bargaining tool for the property investor. If they argue their case soundly, they can often get the building much cheaper and can then replace the system for a lot less,saving money at every turn.
In one fell swoop they clinch a building for less and replace an entire system in their building at discount rates, which improves the overall value of their investment. However, if these replacement costs are underestimated, and the system turns out to be very expensive to replace, the cost pendulum can swing the other way.
Too many expensive replacement costs that are not estimated accurately can end up as a bad investment for the property investor and a failed project for the commercial building consultant. That’s why it’s important to do accurate and thorough cost assessments.Based on this data, the investor will decide whether to buy or not.
Your Construction Manager will need a strategy if your teams have suggested a replacement at some point in time. If, for example; a building’s HVAC system needs to be replaced, a lot goes into this process.
A complete system replacement strengthens your building and extends it’s HVAC life. It also improves the value of the building, and because of greater efficiency, you may even be able to charge more rent there. If your tenants, for example, have been requesting air-con, and you eventually have it installed throughout your building, you can increase their rent a little.
Because these replacements cost upwards of tens of thousands,even hundreds of thousands of dollars more they need to be carefully planned by the Construction Manager. The commercial building consultant must have these system replacements under control.
Sometimes you’ll find in a fairly old building that several systems need to be updated or outright replaced. Whether it’s updating your electrics to be more green or replacing your plumbing to be cleaner and more efficient, there are always things you must do to keep your building modern and in demand.
When you’re conducting your building condition checks, make provision in your budget for any recommended major system replacements. Leave them too long and you’ll find that your building begins to cost you more and more money and that it loses a lot of its charm and appeal. Unhappy tenants don’t stay very long.