Recent tenant demand for improved HVAC filtration and ventilation, combined with today’s low interest rates begs the question: Is it the right time to make a significant capital investment in your building’s HVAC system?
On one hand, low interest rates are always an opportune time for renovations. And yet, due to low occupancy rates and a pandemic raging across the United States, many building owners and operators are understandably wary of jumping into a major capital expense. Ironically, low occupancy rates in tenant-occupied commercial buildings have provided the perfect setup for capital improvements.
There are five main reasons that the time is right for facility managers to seriously consider HVAC capital improvements at this moment. They are:
While there is a great case to be made for completing capital improvements ahead of America returning to work, there are a number of considerations building owners and operators need to be aware of when doing so.
First and foremost, know you’re playing the long game — especially when doing it amid a worldwide pandemic. According to JLL’s United States Office Outlook Q3 2020, the coronavirus pandemic has led to a 28.9 million-square-foot decline in office occupancy, the largest single-quarter drop on record, as well as a 16 percent surge in vacancy.
We know that a pandemic once every 100 years will not derail the U.S. commercial real estate market for good. Yet the major unknown in this scenario remains: When will it rebound? While we lack a crystal ball to answer this question, we do know that a property that remains frozen in time circa March 2020 will be significantly less desirable than a comparable facility that has upgraded its HVAC system and other infrastructure in the name of creating a safer and healthier space for occupants.
Similarly, Band-Aid solutions will not likely pan out in the long term, either, as tenants will see through them over time. Tenants will be looking to move to a facility that prioritizes building occupant health, including visible upgrades to public spaces, restrooms, shared amenity spaces, elevators, and more.
Read this article on FacilitiesNet.
More From Our Knowledge Hub