As reported on CBS Evening News by Jeff Pegues
“A recent audit has found that the federal government continues to own and maintain 77,000 empty buildings, costing taxpayers $1.5 billion per year in electric bills, roof repairs and other monthly costs.“
What’s in my portfolio?
That expression ‘knowing is half the battle’ is true in this case for the GSA. They know they have 77,000 empty buildings and that some of those buildings could generate much needed revenue if sold. Wrapping your brain around the size and contents of your portfolio is a great place to start developing a strategic capital planning program. Many of our facility condition assessment customers are surprised to find assets they never knew existed as a result of one of our audits.
‘Good condition’ doesn’t always match reality.
As Dan Tangherlini of the GSA points out, what may be labeled ‘good condition’ on paper might actually be in not so good condition in reality. It’s important to create a definition of what ‘good’ is within your organization and this can vary widely across different industries. The definition of good can also vary widely within your portfolio. For example, if you have buildings that are customer facing and others that are not, you may want to treat those buildings differently. Using the facility condition index is a great way of assigning an overall grade to your portfolio and it’s also a way of setting a numeric goal for the overall condition of your buildings.
“$1 of deferred maintenance generally turns into $4 of capital reinvestment…”
Facility managers continually balance budgeted projects with unplanned expenditures. It can be hard to plan spending for 5, 10 or even 15 years down the road, even though that may mean you will ultimately spend more because of this. This is where strategic facility managers can take advantage of facilities capital planning software and planning tools to help them map out the funds needed to maintain their facilities long-term. Robust reporting tools can also enable facility managers to create well supported funding requests and communicate facilities goals to internal stakeholders.
The key to moving forward for the GSA and for any organization with a large real estate portfolio is to take the steps necessary to strategically address their buildings. How can you do this?
- Know what’s in your portfolio.
- Know what condition your buildings are in and what the definition of ‘good condition’ means to your organization.
- Know how to prioritize your spending and make data driven decisions on what to repair, divest, demolish, and so on.
Find out more about how you can get started with your strategic capital planning program.