Institutions that decommission buildings in poor condition can save thousands in operations and maintenance costs. But facilities teams struggle to win senior leaders’ support to demolish buildings on campus.
While facilities leaders recognize the value of principled divestments to the broader deferred maintenance strategy, decommissioning space on campus is nearly always an unpopular and politically tenuous decision. Even when senior leaders understand the value of this strategy, they may be unwilling to publicly support decommissioning for political reasons.
One institution that has successfully demolished buildings on campus is the California Institute of Technology (Caltech). Caltech’s facilities team successfully divested from buildings in the worst conditions by using cost-benefit analysis to win support from senior leaders.
Caltech’s facilities executive presented the provost with data that outlined targeted demolition’s effect on annual savings and deferred maintenance. For each building, facilities calculated demolition costs and the immediate annual savings earned by eliminating utilities, operations, and maintenance costs. Next, they calculated the payback time frame, based exclusively on savings. Finally, facilities calculated the amount of deferred maintenance eliminated through demolition. By leveraging a straightforward cost-benefit analysis, facilities gained the provost’s support to demolish five buildings with an average facility condition index (FCI), which measures the cost-to-correct condition deficiencies against the current replacement value, of 0.84.
As shown below, Caltech’s building demolition significantly improved overall campus condition and reduced annual expenses. Since 2012, the institution has demolished 25,000 square feet of space and eliminated $4.7 million from their deferred maintenance backlog. Due in part to these demolitions, Caltech has been able to maintain an FCI of approximately 0.24.