Getting the most out of your renovation dollars.

Building renovation and modernization has become a crucial issue for landlords in today's high-tech business world where tenants are demanding more in the way of efficient building systems. In response, many landlords of older buildings have launched major improvement campaigns in order to attract credit-worthy tenants and capitalize on the inflated rents that have been created by the tight space market.

For building owners, there are always basic questions to ask before proceeding with a major renovation. How much work is needed? How can we get the most for our money? What improvements will bring the greatest return on investments?

Many of the answers depend on the age and condition of the facility, its location, and the owner's target tenant market. They also depend on changes in building codes and technology, which often dictate the need for upgrades in HVAC and electrical systems, telecommunications, life safety systems, and structural components. Facilities may also have to be brought into compliance with the Americans with Disabilities Act, and hazardous materials such as asbestos may need to be addressed.

When it comes to renovations, owners who invest in planning can count on saving money and achieving satisfactory results. The greatest opportunity to control costs is during the early stages of a renovation. Retaining a construction manager (CM) to work with the architect can put the owner ahead of the game in the long run. A CM will perform value engineering analyses and constructability reviews that can bring about substantial cost savings.

The owner should first identify the design elements and operational features on which he wants to spend money. These decisions will be based on how he wants to market the building. While aesthetics are important and may provide the most obvious transformations, they do not always yield the best return. Nowadays, tenants are increasingly concerned with operational efficiency and flexible electrical capacity and recovery, and high-tech cabling capabilities.

To determine the economic feasibility of replacing or upgrading any of the buildings features, the owner and CM should determine the cost/benefit potential by comparing alternative schemes. For example, compare the cost of several types of facade replacement with the lesser cost of repainting and caulking. Then compare the rents expected to be achieved with each.

Whether the job entails installing new windows, replacing HVAC systems, improving lighting efficiency or adding a mezzanine floor, a detailed audit and existing conditions survey should be undertaken to establish and confirm the existing situation. The best way to keep problems from turning into major fiascoes is to anticipate and plan for them.

For example, if new windows are being installed, a site investigation should be done to check the condition of the existing subframe and the structural integrity of the lintels, as well as the exterior walls and sills. There are numerous problems that might arise which could delay the entire project if not uncovered early. Budget projections could also be thrown severely off course.

The project team should survey and document the conditions that exist in the building. The survey examines the structure, spatial layout and clear height and levelness of floors, load capacity and column spacing. It is also important to verify the architect's drawings for constructability, code and work rule violations to minimize time-consuming, costly change orders.

For example, if the owner wants to add a balcony, or make some other structural change to a "steel" turn-of-the-century building, do not assume that you can simply connect new steel to the existing structure. Sometimes, older buildings are actually framed in cast iron, which is not easily welded. The prohibitive cost of attaching steel to cast iron could force a change in design.

Review maintenance and repair records. The project team also needs to know about walls, ceilings, pipes and mechanical systems. Do not rely on old floorplans, which could result in faulty assumptions that translate into lost time and money. Installing new M.E.P. roughing in older buildings, for example, can be very complicated. Pullout tests for anchors should be performed on existing slabs to determine if slabs can carry loads of M.E.P. roughing.

To eliminate further surprises as to how the existing system is laid out, it is necessary to examine maintenance and repair records, interview maintenance staff, and make preliminary wall and ceiling probes and steel coupons. If it is not possible to route new ducts and pipes through existing walls and ceilings, creative alternatives are available, such as creating plenums, using false ceilings, new partition walls, closets or exterior shafts to house new roughing.

Once the owner has specified his list of priorities, and ascertained the existing conditions from the survey, the design development stage can proceed. Concurrently, there should be an evaluation of costs by the CM. As part of that process, value engineering analyses should be conducted to ensure the owner is getting the most mileage out of the options that have been selected.

Value engineering is a means of achieving the owner's program goals and architect's design intent in the most efficient and least expensive way. The analysis can examine alternatives for every element of the project to make sure that the owner is getting the best choice for the money he is spending.

Whether a renovation project involves a major rehabilitation or a simple sprucing up, the steps that have been laid out are essential to a successful renovation program.