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Tricks Of The Trade: Recapitalization

Written by Retired Columnist. Posted in Ask The Expert, Columnists, Magazine, Retired Columnists, Topics, Tricks of the Trade

Published on April 06, 2002 with No Comments

By James C. Elledge, IFMA Fellow, CFM, FMA, RPA, RIAQM
Published in the April 2002 issue of Today’s Facility Manager

Q In today’s constrained fiscal environment, fighting for adequate facilities funding is an uphill struggle. In attempting to quantify/compare our need for facility recapitalization, I have come across several inferences to an “industry standard” of a 50 year facility recapitalization rate. I’m looking for the actual sources that have information regarding expected facility service life for various facility types. Can you point me in the right direction?

Neil Arnold

A My first suggestion is to pay a visit to FM Data Monthly on the Web, where there is an excellent article on building recapitalization from Thom Bogle, vice president of Atlanta, GA-based Koll Corporate Services. The article is entitled “Three Approaches to Setting Recapitalization Rates.”

While at that site, you should also review the two part article entitled “Recapitalization & Capital Renewal—What’s the Number? The Problem of Planning For and Managing Waves of Expiring Assets.” This white paper explains how to develop a basis for rational planning and budgeting and examining such issues as depreciation, flat-rate budget models, subsystem planning, and the “best practice” approach.

Elledge,facility/office services manager for Dallas, TX-based Summit AllianceCompanies, is the recipient of the Distinguished Author Award from theInternational Facility Management Association (IFMA), is an IFMA Fellow, and isa member of TFM’sEditorial Advisory Board. All questions have been submitted via the “Ask TheExpert” portion of the magazine’s Web site. To pose a question, visit this link.

About Retired Columnist

This expert formerly served as regular contributor to Today’s Facility Manager magazine. His vast knowledge of the facility management profession continues to provide a rich resource for facility managers by way of this online archive.

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