Repair or Replace?
Facilities managers must make tough decisions on whether to repair or replace certain equipment.
By Tyra Triche
In facilities management, it’s inevitable to come across equipment that may be experiencing unexplained failures. In strategic facilities management, a critical consideration is what would be better for the organization — repairing or replacing the equipment. Important questions facility managers consider in these scenarios include: Which option will be the most cost-effective? Which option will relay the best performance results? The decision can vary depending on the type of equipment, how much it impacts the facility’s everyday operations, and the historical servicing of the equipment from asset data.
Here, four trade and analytics experts from CBRE Group Inc., a global commercial real estate services company, advise facilities managers about when it is best practice to repair versus replace regarding HVAC, plumbing and electrical assets.
Roy Chapman, a Senior Retail Account Manager at CBRE, is a second-generation HVAC professional with more than 30 years of experience in the field. “The rule of thumb is that for any piece of HVAC equipment that is more than 10 years old and requiring major repairs, we typically recommend a replacement,” he said. “Usually, that milestone is when units start breaking down more frequently, and they become less efficient.”
Chapman said that if you find your HVAC unit is in consistent need of the same repair or if the unit is having issue staying up and running, a replacement is most likely needed. Capacitor relays, blowers, condenser fans and compressors are the most common parts that usually need some repairing over time. “Routine maintenance can catch a lot of this,” he said. “Especially when it comes to the smaller parts. You’re able to check the voltage or just do a visual inspection.” Visual and aural cues, like burn marks and loud sounds from the motor, are indicators that some part of the HVAC unit is failing.
When replacing an HVAC system, FMs should consider not only size but also whether the machine that they’re purchasing is properly constructed for the right environment. For example, a facility in Florida will need an HVAC system that can handle the heat and humidity of the surrounding area.
Timing is also very important as to not disrupt the consumer and employee experiences. Chapman said that for high-traffic facilities, weekend HVAC repairs and replacements are typically best.
CBRE partners with clients to understand when repair vs. replace decisions need to be made, always providing an option for both – backed by data, Chapman shared. The cost of a major HVAC repair can be anywhere from $3,000 to $20,000, depending on the type of repair and equipment. Equipment replacement can cost between $10,000 and $50,000.
Michael Jacobs, a Plumbing Trade Specialist at CBRE, has been working in facilities management for seven years, and previously worked as a field technician for local plumbing companies for about 25 years. He said that the most common plumbing issues he sees are with drains, leaks and especially water heaters. He noted his team replaces water heaters every single day.
“I’ve seen water heaters that were 15 years old that operated perfectly fine, and I’ve seen one that was three days old spring a leak,” Jacobs said. “Everything is really on a case-by-case basis.”
Most often, water heaters break due to a system failure, he said. “If it's a mechanical issue, most water heaters can be repaired,” he said. “However, if it's outside the warranty period, you have to weigh your costs.” For plumbing, he said that repairing equipment will be a much cheaper option than replacing it more often than not. However, depending on the age and condition of the fixture, the cheaper option may not be the wisest.
Many of the clients Jacobs works with are retail stores, and in those spaces, plumbing can typically be repaired or replaced during the business day. For their clients that are medical facilities, the timing is more pertinent. For example, kidney dialysis centers rely on hot water for operations. In those cases, repairs or replacements must be done after hours.
LaTonia Shutts, an Electrical Trade Specialist, became an electrician in the 1990s after being inspired by her grandfather who worked in the field. Some of the most common electrical issues she’s seen are problems with old lighting technology and weather-related damage. “You'd be surprised at how fragile incandescent and sodium pressure bulbs are and how long they can last,” she said. “You've got sodium pressure bulbs (low pressure and high pressure), metal halide bulbs and mercury vapor bulk bulbs.” This old technology can be harmful for the environment and run incredibly hot.
Shutts said that in some regions of the country, especially in places that don’t get a lot of rain or humidity, like the Southwest, these old, harmful sodium pressure lighting technologies are still in use. However, “a lot of companies are starting to understand that to try to repair these is just going to be one service call after the next.” New lighting fixtures will most likely cost less than repairing those old, heavy and hot fixtures.
She said that internally, many electrical issues are caused by leaks from other equipment. “There can be leaks from so many sources,” Shutts said. “It could be a roof drain or a roof leak. You've got HVAC condensation that can cause leaking that affects lighting and circuitry altogether.” However, she explained that there are also some electrical issues that happen that just have no explanation.
“When we send somebody to troubleshoot, we fully expect that they’re going to do some critical thinking.” she said. When making electrical repairs, even if a technician feels that they’ve found the problem early on, they must do a complete inspection. Often, if work needs to be done on a circuit or floor machine, technicians will want to inspect the machine’s start up and amp draw. “We're going to see how many amps are drawn upon startup, assuming that we know what the amp draw should be from the machine and what it should be in regular use. If we see that it's over amping, it's time to maintenance that machine or replace it.”
Making Informed Decisions
Facilities managers will find that when making the decision between repairing and replacing, data and analytics of their site will be critical. Robert Gould, a Senior Director at CBRE with a focus on business analytics, has been working in the facilities management space for a decade now. In his current role, he oversees a team of analysts whose sole purpose is to support customers.
“Everyone has dashboards and access to information,” he said. “But it's really how you take that information, how you build those dashboards, and use them in a way that drives actions.” His team partners with facilities managers to build dashboards that will allow all parties to see real-time trends, as well as providing more insights quickly. The facilities manager will then be able to identify historical trends like which parts are being replaced, the frequency in which an asset is being repaired and more.
Gould’s team will also “collect data around the conditional life of that asset, enabling us to go back to the customer and say, ‘Here's what we're noticing within this specific area,’ whether that is specific to their location or others within that market space,” he said. Based on the history of a facility, the asset assessment and market trends, analysts will then be able to make a recommendation to facilities managers on when a repair or replacement will make the most sense.
He recommended that anyone who’s getting access to and working with large amounts of data should take a beginner’s data analysis course to establish a foundation for interacting with such high-level information. Facilities managers may also want to consider establishing an analytics team to do this work so that they can focus on making business decisions quickly.