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Facility Life Cycle
Typically, all facilities of a facility class, follow a similar pattern whereby operating costs and the need for significant capital renewals and adaptations changes as the facility ages.

In this regard, five broad facility life cycle stages have been identified.
  • Pre-Natal/Planning (Years 0).  During this stage, the facility is in the planning and/or construction stage. There are typically no maintenance or capital improvement funds required.
  • Childhood (Years 1-16).  During this period, standard operating and maintenance budgets are typically adequate to operate the facility.
  • Adolescence (Years 17-29).  It is during this stage that standard operating and maintenance budgets may not be adequate to address the major refurbishment or replacement of building elements that have deteriorated. The ability of facility operators to fund these addition.al expenditures can have a significant impact on the future lifespan of the facility.
  • Adulthood (30-49). During this stage, many of the facilities major components will require replacement. In additional to standard operating and maintenance budgets, significant capital improvements may be required to extend the life of the facility.
  • Old age (50 plus).  During this stage, the facility has a assets that are now at a variety of placed in service ages. There is no longer a single baseline and the facility managers are tasked with ongoing rehabilitation or replacement projects. Decisions will arise as to the relative merits of continued reinvestment or redevelopment.
Facility life cycle stage assumptions are generalizations and the actual condition of each facility will vary.

Various models have been developed to estimate maintenance and renewal costs at different stages in the lifecycle of a building:

Funding Over the 5 Life Stages
The five life-stages together represent one life-cycle of a building. The team expects that most buildings will continue to operate through multiple life-cycles. The necessary and sufficient maintenance during the first life-cycle (years 1-50) will prepare the owners for the 2nd life-cycle (years 51-100).


Each 50-year life-cycle of a building is represented by a pattern of funding over that life-cycle which increases to a high point (inflection year #1) and then decreases to a low point (inflection year #2). The first high-point inflection on the curve indicates the increasing funding requirements to enable the owners to effectively complete the most significant projects, within life-stage 4 (years 31-50). As the owners move beyond life-stage 4, funding requirements are lower and the 2nd life-cycle commences (years 51-100), albeit at a higher level that includes escalation.
 

Introduction

The first three information bulletins introduced the concept of building asset management, identified the variety of physical assets within a building (such as roofs and boilers) and demonstrated the importance of keeping an inventory of these assets. In this bulletin we start the discussion on what happens to buildings during different stages in their lifecycle, which sets the stage for the long-range planning and budgeting process Every building is unique. The need for maintenance, repairs and asset renewals varies depending on many factors, including: the quality of construction, design details, exposure conditions and the standard of care given by the owners and their property management team.

Notwithstanding the differences between individual buildings, it has been determined that many buildings follow a similar pattern as they pass through different stages in their respective lifecycles. In this regard, five general lifecycle stages have been identified and, using the analogy of the human body, they are summarized conceptually in the figure below.

Although these lifecycle stages are generalizations they enable owners to anticipate future capital renewal requirements and to make informed decisions about budgeting and other resources for maintenance, repairs and asset renewals.

From the figure we see that maintenance costs are generally consistent over the life a building; however, asset renewal expenditures vary dramatically at different times, particularly during lifecycles stage 3 and 4.  The requirements for effective stewardship of the building are similar for all types of property, whether it is a high-rise building, low-rise building or townhouse complex. We can categorize the life cycle stages as follows:

  • “Pre-Natal”  (under 2 years).  During this stage, the building is in the process of being handed over from the developer to the first owners. The assets are new and are covered under a variety of warranties. Maintenance requirements are focused on cleaning activities and periodic inspections.
  • Childhood” (2-16 years).  During this period, the owners have assumed full responsibility for all the maintenance, repairs and long-range renewal planning for the building.  With two years of expenditure experience, the owners have established a preventive maintenance program and are allocating monies to the long-range contingency reserve fund. The owners are starting to address some relatively small renewal projects, which are addressed in more detail in the next section.
  • “Adolescence” (17-29 years).  It is during this 3rd stage that the owners may find that the maintenance budgets established during the 2nd lifecycle stage may not be adequate to address the impending replacement of building assets that have deteriorated and reached the end of their useful service lives.  This phase is represented by a noticeable increase in the number of capital renewal projects (which are discussed in the next section). This life stage often compels owners to seriously reconsider their historical budgeting practices and to make more reasonable funding allocations for asset renewals as the building moves through lifecycle stage 3 and into stage 4.
  • Adulthood (30 to 49 years).  The largest and most expensive of all asset renewal projects tend to occur during the 4th lifecycle stage. As a result, significant funds will need to be reinvested in the building and the standard operating and maintenance budgets will need to be revisited. Some of the assets have been replaced over the preceding 30-40 years and the owners and manager are now operating a building with assets at a variety of different ages. There is no longer a single baseline and the facility managers are tasked with tracking the different assets.
  • Old Age (50 plus years).  At this juncture, all the major assets have been through one renewal cycle.  Therefore lifecycle Stage 5 is essentially a return to lifecycle Stage 2. The owners must now prepare for the next cycle of asset renewals as the building moves beyond its 50th anniversary and embarks upon the next 50 years of operations.

We will now explore each of the five life-cycle stages in further detail, paying particular attention to maintenance, repair and renewal requirements at each stage.

Managing the Lifecycle Stages

There are two tools that are most valuable to help the owners manage the asset during each of the five life cycle stages. These are:

  • Maintenance Plan.  The maintenance plan helps the owners control what happens at each lifecycle stage by ensuring that adequate maintenance is performed to achieve the full service life from the assets.
  • Reserve Study. The reserve study helps the owners predict when the assets are likely to reach the end of their useful service life and to set aside sufficient monies in the reserve fund to offset the financial hardship of special levies.

These decision support tools will be addressed in detail in upcoming information bulletins.


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Fig. Model indicating five life-cycle stages.


Examples of some types of projects that are considered normal during each of the lifecycle stages.
Fig. Examples of some types of projects that are considered normal during each of the lifecycle stages.


Facility Life cycle model indicating get ahead costs
Fig. Lifecycle model to indicate the stage at which functional obsolescence ("yellow") is most prevalent.


Our cartoon character ("I. Care") is debating whether we can reach life or extend life of facilities
Fig. Our cartoon character ("I. Care") is debating whether we can only "reach" life or, in some cases, "extend" the service life of assets and facilities.



The impact of premature failure on the facility lifecycle model. A project that should normally occur in the adulthood life stage occurs in the childhood or adolescence life stage.
Fig. The impact of premature failure on the facility lifecycle model. A project that should normally occur in the adulthood  life stage occurs in the childhood or adolescence life stage.


Age cohorts across four life stages
Fig. Age cohorts across four life stages.


Fig. YouTube Video

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Fig. BS-7543 Life Standard

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Fig. CSA-1986 Life Standard.

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Fig. Life by facility class.

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