Predictive Maintenance: A Key to Maximizing Property Value

July 31, 2006
Predictive maintenance ensures that building equipment is appropriately installed and managed – for the long term

By Rebecca Kim

For residential high-rise buildings, as well as other commercial and institutional facilities, predictive maintenance plays a key role in maintaining property value and reducing risk for the building owner. Whereas higher property value is often perceived as a result of attractive building appearance or amenities, the building systems behind the façade have the greatest impact on value.

Unbeknownst to many high-rise building residents, not all building owners and property managers keep well-maintained building systems. This often results in equipment failure and expenses for the building owner, as well as inconvenience, discomfort, and unexpected costs to residents. Unless building equipment is maintained in accordance with manufacturers’ specifications, warranties can become null and void, and property values can plummet.

Because predictive maintenance keeps building systems running and in good condition, the equipment operates more efficiently and unnecessarily high utility costs are reduced. The life expectancy of the equipment also is extended, and expensive replacement costs can be deferred for longer periods of time. The following is a guide to developing an effective predictive-maintenance program:

Step 1: Install Appropriate Building Equipment
The first step in preventing unnecessary breakdowns and maximizing a property’s value is specifying the appropriate equipment to suit the building’s needs. Before building a new residential high-rise, for instance, it is important for the building owner to consider the wear-and-tear that may occur due to the high volume of people centralized in one location. For example, industrial-strength garage gates should be installed (rather than gates typically used for private residences) because of the frequency of vehicles entering and exiting. The initial cost for an industrial gate may be higher than that of a standard gate; however, money will be saved in the long run from not having to repeatedly replace an inefficient gate.

A building owner should also consider alternative, creative ways of implementing building systems that will prevent unnecessary costs down the line. For example, creating trashrooms with hard-surface floors (rather than trash chutes in carpeted hallways) will reduce the frequency of carpet cleanings and replacement.

Step 2: Develop a Predictive-Maintenance Schedule
Developing a maintenance schedule that systematically checks a building’s vital systems is a crucial step in reducing breakdowns and unnecessary repair costs. Ideally, predictive maintenance should be performed on all equipment; however, it is most important to perform maintenance on the systems that represent the greatest risk of exposure to resident safety and real estate value.

Systems such as air-conditioning, water treatment, fire and life safety, plumbing, and electrical (as well as pool and spa equipment, and access systems) should all be regularly maintained in accordance with the manufacturers’ guidelines for frequency and work performed. A typical checklist might include the symptomatic conditions to look for, how often these items must be checked, and location for an inspector’s signature. Creating checklists for each piece of equipment is the simplest method of tracking maintenance and guarantees that the appropriate work is being performed in order to meet warranty requirements.

Step 3: Document All Maintenance
Record-keeping plays the most significant role in predictive maintenance and warranty management. Once inspection schedules have been created, it is imperative that the performing engineer document all work that is completed. Signed and dated reports specifying the exact work performed will be required by the manufacturer to validate a warranty. If the maintenance is performed, but there are no reports to demonstrate such work, the warranty will not be honored by the manufacturer; the building owner or residents will have to pay for repairs.

Hiring the most qualified people to perform building maintenance is key to ensuring that maintenance is performed correctly and accurate records are kept. Vendors who perform building maintenance are only as good as their staff, so accountability is paramount. Reputable property managers will insist on hiring the most qualified people they can find, even if that means paying well above market wages to ensure that the staff is as educated and trained as possible.

Step 4: Submit Documentation
For residential high-rises, submitting all documentation to the homeowners’ association’s board of directors (or to the building owner in commercial structures) each month is an important step in predictive maintenance. As time goes on and the developer turns over the building to the homeowners’ association, predictive maintenance becomes a necessary means of keeping costs down for residents. The maintenance records not only serve as recommendations for necessary repairs; they provide a reference for building owners and the board to track maintenance and repair history, and also serve as evidence to the manufacturer that all necessary maintenance has been performed.

A responsible building owner or board of directors will take all recommendations into consideration, performing the necessary repairs in order to prevent future breakdowns, unnecessary costs, and resident discomfort associated with equipment downtime.

Maintaining or increasing the value of a high-rise property depends on the operational capacity of its vital mechanical, electrical, and plumbing systems. When these systems are not functioning efficiently, each residential unit is negatively affected. Although some property managers may insist that maintaining building equipment is too costly or time-consuming and that only emergency repairs should be made, predictive maintenance keeps property values up and residents satisfied.

Click here for the Sample Preventive Maintenance Record

Rebecca Kim is president and CEO at San Diego-based Urban Property Services Inc. With 23 years of experience in the multi-family real estate industry with companies such as Ventana Property Services and BRE Real Estate Investment Trust, Kim can be reached at (619) 239-9100.

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