Just Curious...Do you know what buildings really cost? Fred and Barbara discuss TCO, the Total Cost of Ownership, and why knowing the TCO is critical to effective decision-making during design. Shouldn't you be curious about the energy costs, maintenance costs, interest costs, and other costs that may make it difficult to afford ownership?
See the ChatGPT assessment of TCO below:
When trying to reduce TCO, building owners may face several challenges, including:
Balancing short-term and long-term costs: Some cost-saving measures may have an upfront cost but lead to long-term savings. For example, investing in energy-efficient technology may have a higher upfront cost but lead to significant savings in utility costs over the building's lifespan.
Finding the right balance of cost-saving measures: Building owners may need to implement multiple cost-saving measures to achieve their desired TCO reduction. However, finding the right balance of cost-saving measures can be challenging, as some measures may conflict with each other or have unintended consequences.
Maintaining quality: Cost-saving measures should not compromise the quality of the building or its operations. For example, reducing custodial staff to save on wages may lead to a decline in cleanliness, which could negatively impact the building's reputation and tenant satisfaction.
Securing financing: Some cost-saving measures may require significant upfront investment, such as upgrading to energy-efficient technology or retrofitting a building for accessibility. Building owners may need to secure financing to implement these measures, which can be challenging, particularly for small or medium-sized building owners.
Changing tenant behavior: Some cost-saving measures may require changes in tenant behavior, such as turning off lights or adjusting thermostat settings. Building owners may need to educate and incentivize tenants to adopt these changes, which can be difficult to achieve.
Overall, reducing TCO requires a careful balance of cost-saving measures, long-term planning, and a commitment to maintaining quality and sustainability. Building owners may benefit from consulting with experts in building operations and finance to develop a comprehensive strategy for reducing TCO.
For more information about TCO see the following:
https://www.appa.org/appa-total-cost-of-ownership-tco-part-1-key-principles/
https://www.appa.org/facilities-manager/appa-total-cost-of-ownership-the-link-to-excellence-through-data/
https://system.suny.edu/media/suny/content-assets/documents/capital-facilities/ppaa/Total-Cost-of-Ownership-v1-1.pdf
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