Facilities  Management  (FM)  reinvented  itself  over  the  last  several  years  and  its  professionals  have  worked  hard  to  demonstrate  its  role  as  an    

instrumental  component  to  the  overall  success  of  institutions.    The  most  effective  FM  departments  function  strategically  and  work  

alongside  executive  teams  on  progressive  initiatives  such  as  technology  integration,  sustainability  and  energy  efficiency  –  all  of  which  make  

positive  impacts  upon  the  financial  stability  of  organizations.    

Specializing  in  FM  executive  searches,  Helbling  &  Associates  partners  with  healthcare  and  higher  education  institutions  in  attracting  and  

securing  talented  professionals  who  play  proactive  roles  in  the  development  of  efficient  and  progressive  organizations.    Within  this  outlook,  

we  will  look  at  these  owners  and  their  FM  opportunities,  trends,  objectives  and  strategies,  which  make  it  an  exciting  time  for  this  sector  and  

its  professionals.      

Healthcare  2012:

While  the  healthcare  market  is  already  at  a  historically  high  level,  REED  Construction  Data  is  forecasting  an  8%  increase  in  construction  

spending  for  2012  and  a  13%  increase  for  2013.    Sharing  the  challenges  of  financing  and  government  policy  uncertainty  with  other  sectors,  

healthcare  is  seeing  the  demand  for  special-­‐care  facility  construction  and  renovation  of  existing  facilities  surpassing  those  issues.    The  U.  S.’s  

aging  population,  outdated  facilities  and  quickly  advancing  technologies  are  driving  activity.    

The  U.  S.  Census  Bureau  projects  that  by  2020  the  number  of  Americans  65  years  and  older  will  

grow  from  40M  to  54.6M,  an  increase  of  36%.    If  the  number  of  hospitals  expands  in  conjunction  

with  the  senior  population  over  the  next  two  decades,  the  country  will  see  more  than  2,000  

additional  hospitals  and  about  340,000  additional  beds.  

Healthcare  reform  will  also  help  keep  this  sector  active.    According  to  the  National  Real  Estate  

Investor,  the  32M  individuals  who  will  be  covered  under  the  new  law  will  require  64M  sf  of  

additional  space.      The  increase  in  additional  square  

footage  needed  would  be  11%  by  2019.    

According  to  the  results  of  a  survey  by  Health  

Facilities  Management  and  the  American  Society  for  

Healthcare  Engineering  (ASHE),  73%  of  healthcare  construction  is  currently  for  renovations  and  

modernization  of  facilities  to  update  IT  infrastructure  for  greater  clinical  integration,  and  to  make  them  greener  and  more  patient-­‐friendly.    

It  should  be  noted  that  a  dominant  trend  is  to  focus  more  on  ambulatory  facilities  than  on  in-­‐

patient  care  facilities  to  effectively  address  the  needs  of  the  population.    Related  construction  

projects  included  in  this  sector  are:    nursing  homes,  assisting  living  centers,  physician  offices,  

clinics,  outpatient  centers  and  continuing  care  retirement  communities.  

73% of healthcare construction is currently

for modernization of facilities to update IT

infrastructure for greater clinical integration, and to make them greener and more patient-friendly.

Lucile  Packard  Children’s  Hospital  at  Stanford

Facil it ies  Management  Outlook  2012 Focus  On:    Healthcare  &  Higher  Education  Trends  in  Strategic  Initiatives

Part  I

Construction Real Estate EngineeringFacilities

R E T A I N E D E X E C U T I V E S E A R C H

Higher  Education  2012:

Despite  decreased  endowments  and  continued  tight  financing,  higher  education  institutions  are  initiating  /  continuing  their  long-­‐term  

capital  programs.    Over  the  last  several  years,  this  sector  has  become  increasingly  ambitious  towards  

green  building,  sustainability  and  energy  efficiency,  which  are  the  primary  drivers  of  new  construction  

and  renovation  projects.    

The  United  States  Green  Building  Council  (USGBC)  claims  that  higher  education  leads  all  sectors  in  

green  building  in  terms  of  square  footage,  having  the  highest  number  of  registered  and  certified  

LEED  projects.    The  decreased  operating  costs  that  result  from  

green  building  are  the  impetus  for  this  activity  as  this  concept  

can  reduce  energy  usage  by  30  –  50%  on  average.    With  

institutions  facing  extremely  high  deferred  maintenance  costs,  

effectively  managing  these  expenditures  can  determine  their  

long-­‐term  financial  stability.  Additional  benefits  of  green  building  include  carbon  footprint  reduction,  an  initiative  to  

which  many  institutions  have  committed.    

Among  the  largest  college  and  university  construction  projects  in  the  

planning  phase  are:

‣ Fordham  University  Lincoln  Center  Expansion  (NY)  -­‐  $1B

‣ University  of  Maryland  East  Campus  Redevelopment  (MD)  -­‐  $700M

‣ Palomar  Community  College  District  Proposition  M  (CA)  -­‐  

$613M

‣ Bluegrass  Community  Technical  College  (KY)  -­‐  $480M

‣ Indiana  University  of  Pennsylvania  Student  Housing  -­‐  $250M  -­‐  $400M

‣ Arts  &  Transit  –  Academic  Building  for  Creative  /  Performing  Arts  (NJ)  -­‐  $300M

‣ Mixed-­‐Use  Campus  &  Osteopathic  School  (AL)  -­‐  $279M

‣ George  Washington  University  Science  &  Engineering  

Building  (DC)  -­‐  $275M

‣ New  York  City  College  of  Technology  New  Academic  Building  (NY)  -­‐  $252M

‣ Academic  Village  at  Point  Park  University  (PA)  -­‐  $244M

*Source:  ENR  11/7/11

Among  the  largest  healthcare  projects  are:

‣ Stanford  University  Medical  Center  Expansion  (CA)  –  $3.5B

‣ Medical  Lifecare  Campus  (CA)  –  $3.3B

‣ North-­‐Shore  Long  Island  Jewish  (NY)  –  Approaching  $2.5B

‣ Scripps  Health  (CA)  –  $2B

‣ Union  Center  Medical  Campus  (NV)  –  $1.5B

‣ Louisiana  State  University  Medical  Center  (LA)  –  $1.2B

‣ Howard  University  Medical  Campus  (DC)  –  $1.1B

‣ University  of  California  San  Diego  Health  System  (CA)  –  More  than  $1B

‣ Seattle  Children’s  Hospital  (WA)  –  $1B

‣ University  of  Connecticut  (CT)  –  $1B

‣ CA  Pacific  Medical  Center  Cathedral  Hill  (CA)  –  $900M

‣ Duke  University  Health  System  (NC)  –  $800M

‣ Veterans  Administration  Hospital  (CO)  –  $800M

‣ Exempla  St.  Joseph  Hospital  (CO)  –  $750M

‣ Prince  George’s  Hospital  (MD)  –  $600M

‣ Massachusetts  General  Hospital  (MA)  –  $579M

‣ Carl  R.  Darnall  Army  Medical  Center  (TX)  –  $503M

‣ McLaren  Health  Village  (MI)  –  $500M

‣ Henry  Ford  Health  System  (MI)  –  $500M

‣ Omaha  Veterans  Administration  Hospital  (NE)  -­‐$500M

*As  of  November,  2011

The USGBC claims that higher

education leads all sectors in green

building in terms of square footage,

having the highest number of registered

and certified LEED projects.

George  Washington  University’s  Science  &  Engineering  Building

Trends  in  Strategic  Initiatives

‣ Aligning  Information  Technology  (IT)  and  facilities.

This  initiative  is  prevalent  among  healthcare  and  higher  education  institutions.    Organizations  seek  to  create  and  integrate  software  systems  that  work  in  tandem  with  financial  systems  to  effectively  manage  their  utilities,  facilities,  capital  projects  and  budgets  on  a  real-­‐time  or  close  to  real-­‐time  basis.  

‣ Improving  energy  management.

Utilities  management  is  a  rapidly  advancing  area  of  FM  and  it  is  central  to  the  short  and  long-­‐term  plans  of  every  institution.    Some  organizations  are  strategically  taking  advantage  of  utility  rebates  and  cost  savings  of  locking  in  fuel  and  utility  prices.    Others  are  pursuing  comprehensive  commissioning  and  retro-­‐commissioning  programs.    

‣ Initiating  Commissioning  &  Retro-­‐Commissioning.

Building  Commissioning  (Cx)  and  Retro-­‐Commissioning  (RCx)  have  received  interest  from  the  institutional  sector  for  their  cost  and  

energy  saving  benefits.    Statistics  show  a  commissioned  building  can  have  average  operating  costs  that  are  8  –  20%  below  those  of  

a  non-­‐commissioned  building  and  those  savings  are  only  the  beginning  of  Cx’s  advantages.    RCx  has  been  found  to  generate  energy  

savings  of  about  16%  annually.  

Two  prominent  higher  education  institutions  that  have  aggressive  programs  are  University  of  Chicago  and  University  of  Michigan.    

‣ Utilizing  green  building  and  sustainability  to  increase  competitive  advantage.

Though  higher  education  leads  in  the  amount  of  LEED-­‐certified  square  footage  in  the  U.  S.,  healthcare  is  not  far  behind.    Green  

building  and  sustainability  continue  to  grow  in  importance  and  prominence  worldwide.    Institutional  owners  are  performance-­‐

driven  and  are  increasingly  demanding  green  construction  and  LEED-­‐certified  projects.    In  fact,  many  major  higher  education  

institutions  have  announced  that  they  will  only  build  LEED-­‐certified  facilities.    

Supporting  this  initiative  is  the  U.  S.  Green  Building  Council  (USGBC).    In  April  2011,  it  added  a  healthcare  category  to  its  LEED  rating  system,  encouraging  developers,  designers  and  contractors  of  healthcare  projects  to  implement  services  and  programs.  

     

‣ Experimenting  with  innovative  technologies  and  alternative  project  delivery  methods  for  capital  projects.    

New  technologies  continue  to  shape  the  way  capital  projects  are  designed  and  delivered.    Pressures  continually  mount  to  keep  project  costs  down  and  to  increase  efficiency,  which  is  why  BIM  has  earned  much  respect  in  the  institutional  sector.    With  its  many  benefits  for  owners,  designers  and  contractors,  its  market  will  only  expand.  

Institutional  owners  consistently  seek  to  maximize  their  return  on  investment  (ROI)  of  capital  

projects  and  to  generate  revenues  as  quickly  as  possible.    There  are  various  concepts  being  

tested  in  the  marketplace.    While  Construction  Management  at  Risk  and  Construction  

Management  as  Agent  are  still  the  most  popular  for  capital  projects,  new  alternative  delivery  

methods  have  been  successful  in  certain  situations.  

Integrated  Project  Delivery  is  gaining  traction  in  the  industry  offering  an  efficient  construction  

management  process.    This  method  gathers  architects,  contractors,  facilities  staff  and  major  

subcontractors  together  early  in  the  planning  phase  to  easily  provide  “design-­‐assist”  services,  

mitigate  potential  problems  and  streamline  the  entire  process.    

Prefabrication  and  modularization,  proven  methods  in  Europe,  are  emerging  concepts  in  the      

U.  S.  that  are  expected  to  accelerate  due  to  owners  wanting  shorter  schedules,  decreased  

costs  and  a  new  way  to  address  the  worsening  labor  shortage.

Job-­‐Order  Contracting  shares  the  same  concept,  benefits  and  goals  of  Design  Build  but  can  be  used  for  smaller  projects  ranging  

from  $50k  to  $2M  such  as  renovations  and  repairs.    This  is  a  relatively  new  concept  for  owners  and  facility  managers  but  one  that  

can  deliver  quality  as  well  as  efficiency.    Job  Order  Contracting  has  a  strong  record  of  success  with  federal  and  military  agencies.

While CM at Risk and CM as Agent are still the most popular for capital projects, new alternative delivery methods have been successful in certain

situations.

FM  has  become  a  fast-­‐paced  and  rapidly  changing  industry  and  has  earned  its  stature  within  owner  organizations.    Teams  have  to  

continually  stay  abreast  of  the  latest  technologies  and  advancements  relating  to  energy  management,  sustainability,  and  capital  project  

delivery.    They  dedicate  much  time  and  consideration  to  developing  strategies  for  these  programs  that  are  efficient  and  effective  and  that  

maximize  their  ROI.    Helbling  &  Associates  looks  forward  to  continuing  to  serve  our  clients  in  securing  proactive  professionals  who  have  the  

ability  to  positively  impact  their  FM  departments  and  their  overall  organizations.    

Learn  about  the  industry’s  trends  in  talent  management  by  reading  our  FM  Outlook  2012:    Talent  Management  Strategies

Sources:    American  Society  for  Healthcare  Engineering,  APPA,  Associated  Builders  and  Contractors,  Engineering  News-­‐Record,  Facilities  

Management  Journal,  Health  Facilities  Management,  National  Real  Estate  Investor,  REED  Construction  Data,  United  States  Green  Building  Council,  U.  S.  Census  Bureau,  World  Economic  Forum,  Yudelson  Associates

Authors:  

  Sami  L.  Barry,  Strategic  Business  Development   James  G.  Lord,  Managing  Director   Joseph  F.  Wargo,  Managing  Consultant

Related  Information:

Case  study:    

  Facilities  Planning  &  Capital  Development  executive  search  performed  for  a  nationally  recognized  academic  health  system

Article:

  Building  Commissioning  &  Retro-­‐Commissioning:  Gaining  Popularity  Among  Owners

Blogs:  

  Healthcare  Construction  Spending  On  The  Rise

  Top  10  Critical  Facilities  Issues  For  Higher  Education

  Facilities  Management:  Salaries  |  Demographics  |  Changing  Roles

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