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University of Nebraska Medical CenterUniversity of Nebraska Omaha

University of New BrunswickUniversity of New Hampshire

University of New HavenUniversity of New Mexico

University of North FloridaUniversity of North Texas

University of Northern IowaUniversity of Notre Dame

University of OregonUniversity of Ottawa

University of PennsylvaniaUniversity of Rhode Island

University of RochesterUniversity of San Diego

University of San FranciscoUniversity of SaskatchewanUniversity of South Florida

University of Southern MaineUniversity of Southern Mississippi

University of St. ThomasUniversity of Tennessee Health Science

CenterUniversity of Tennessee, Knoxville

University of Texas at DallasUniversity of the Sciences in Philadelphia

University of ToledoUniversity of Vermont

University of WashingtonUniversity of West Florida

University of Wisconsin - MadisonVanderbilt University

Virginia Commonwealth UniversityVirginia Department of General Services

Wake Forest UniversityWashburn University

Washington University in St. LouisWellesley College

Wesleyan University

Planning for the FutureAdapting Facilities to Tomorrow’s Needs

July 12, 2017

Today’s Speaker

Jay Pearlman

Associate Vice President, Sightlines

• At Sightlines from it’s inception

• 20-year industry expert

• Played a leading role in the development of

Sightlines’ services

• Frequent speaker at industry events hosted by

NACUBO, APPA, and AASHE

• A regular contributor to industry publications

• Graduate of Vassar College

Agenda

• About Sightlines

• Planning Challenges Facing Facilities Leaders Today

• Strategies to Effectively Plan for the Future

• Q&A

Join the Conversation

5

Enter questions here at any point during the webinar

Presentation slides and webinar recording

will be sent to each attendee following

today’s session

Leading provider of facilities

intelligence in higher education

helping to uncover ways to use

capital more strategically and

identify opportunities to

improve operational

effectiveness.

Sightlines by the NumbersRobust membership includes colleges, universities, consortiums, and state systems

43States+DC

90%Memberretention

rate

335+ROPA

Members

450Colleges &Universities

170New members

since 20135

Canadianprovinces

Sightlines has advised state systems in:

• Alaska• California• Florida• Hawaii• Maine

• Massachusetts• Minnesota• Mississippi• Missouri• Nebraska

• New Hampshire• New Jersey• Pennsylvania• Texas• Washington

52kbuildings

© 2017 Sightlines, LLC. All Rights Reserved.8

Sightlines is a Gordian CompanyData, software, and expertise for all phases of The Building Lifecycle

Planning for the Future

Download a copy todayhttp://www.sightlines.com/insight/planning-for-the-future/

Before the Roof Caves In

Source: “Before the Roof Caves In II,” published with assistance from APPA and Stanford University

Rick Biedenwig, 1980Founder, Pacific Partners Consulting Group

“One side effect of this rapid growth has been the creation of an increasingly large obligation for the future renewal and replacement of the physical plant.”

0%

2%

4%

6%

8%

10%

12%

Sightlines Database- Construction Age

Built pre-1951• Durable construction• Older but lasts longer

11

Putting Your Campus Building Age in ContextCampus age drives overall risk profile

% o

f C

on

stru

cted

Sp

ace

Pre-War Built 1951 - 1975• Lower quality • Needs more repairs

& renovation1975 - 1990• Quick flash

construction• Low quality

components

Built post-1991• Technically complex• Higher quality• More expensive to maintain

or repair

Modern

Post War Complex

12

Facilities Backlogs Continue to Rise

$81.72 $83.42 $87.19 $88.52 $90.73 $93.27 $95.31 $97.56 $100.07

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

2007 2008 2009 2010 2011 2012 2013 2014 2015

$/G

SF

Backlog $/GSF

The Sightlines backlog total includes maintenance/repair, modernization and infrastructure

13

Facilities Backlogs Continue to Rise

$0

$20

$40

$60

$80

$100

$120

2007 2008 2009 2010 2011 2012 2013 2014 2015

$/G

SF

Public Institutions

The Sightlines backlog total includes maintenance/repair, modernization and infrastructure

$0

$20

$40

$60

$80

$100

$120

2007 2008 2009 2010 2011 2012 2013 2014 2015

$/G

SF

Private Institutions

Replace air

compressors

and steam

stop valves

“Capital

Planning is

more than just

a project list.”Upgrade all

heat

detectorsCosmetic

Repair of

Student

Apartments.

Bathroom

Upgrades

Replace

Doors

Experience Tells Us…

Install

new

sprinklers

Traditional Facilities Assessment

Should I Complete a Facilities Assessment?

TechnicalAssessment

ProjectSelection

Misses opportunities to optimize capital resources

Fails to harness operating knowledge

Doesn’t tie to mission

Ignores financial capacity

Making the Backlog Actionable

Understand the cause of deferral and slow backlog accumulation

3Stop the Bleeding

42Create building

portfolios

Make the Problem

Smaller

Create multi-year

plans

Sustain Impact

of Finite Funding Target capital to reliability,

safety/code, critical asset

preservation

Mitigate Risk1

• Trying to compel action through a daunting DM figure does not work. It freezes decision making and compounds the core issue.

• Facilities leaders need to:

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

2006 2007 2008 2009 2010 2011 2012 2013 2014

MIL

LIO

NS

Total Capital Investment vs. Funding Target

Annual Stewardship Asset Reinvestment Annual Investment Target Life Cycle Need

17

Fix the Cause – Not Just the Symptom

Increasing Backlog & Risk

Increasing Net Asset Value

Lowering Risk Profile

Multi-yearCapital

InvestmentPlan

Building Portfolio Creation• Group buildings• Outline investment strategy

Funding Identification• What financial resources are

available?

Funding Allocation• By portfolio• By investment criteria

Project Identification• Inventories• Interviews

• Other studies

Project Codification• Timeframe

• Package• Investment criteria

Project Selection• Project scores

• Meet investment objectives

The “Bottom-Up, Top-Down” Approach

Technical Strategic

Tie the Inventory to Operations and Mission

Facilities Meetings Organized by Trades

Meet with University Staff to Identify

Programmatic Needs and Funding

Two sets of meetings that run concurrently…

Develop Building Portfolios

Developing a portfolio approach will allow for a focused investment approach based on the Institutional Strategic Direction.

• Building Age• Building Condition• Building Location• Institutional focus• Academic requirements• Student needs

• Historical Significance• Safety/Code requirements• Recruitment/Retention• Transitional Space• Adaptive Reuse

Core considerations to the portfolio approach

• Institutional Priorities• Building Needs• Future Campus Direction

Institutional Leaders for buy in and communication

Not all buildings are created equal WHY?

HOW?

WHO?

Total Needs

$165.4M

Transitional Buildings

$35.2M

174,284 GSF

$202/GSF

Grounds/ Infrastructure

$15.3M

Building Needs

$114.8M

Core Academic

$34.0M

539,944 GSF

$63/GSF

Student Life

$30.1M

392,533 GSF

$77/GSF

Residence Halls

$21.9M

215,279 GSF

$102/GSF

Historic Preservation

$14.9M

87,281 GSF

$170/GSF

Campus Perimeter

$14.0M

116,172 GSF

$121/GSF

Example #1: Functional PortfoliosBuildings are divided by both use and type

Total Needs

$144.3M

Parking

$3.9M

1,1M GSF

$3.6/GSF

Grounds/ Infrastructure

$14M

Building Needs

$110.5M

Beneficial

$41.8M

977K GSF

$43/GSF

Legacy

$29M

574,368 GSF

$34/GSF

Millennium

$28.1M

1.8M GSF

$15.5/GSF

Transitional

$19.5M

240K GSF

$81/GSF

Rental

$7.2M

96K GSF

$75/GSF

22

Example #2: LongevityPortfolios based upon building use

Total Needs

$253.9M

New Construction

$83.3M

Grounds/ Infrastructure

$11.3M

Building Needs

$158.3M

InstitutionallyFunded

Academic

$42.7M

Administrative$18.9M

Science/Research

$33.9M

Athletic

$11.6M

Residence Halls

$18.0M

Faculty Staff & Housing$10.9M

Fraternities & Sororities

$9.0M

Transitional$14.2M

Potential Grants Potential Gifts Potential to Sell Potential Grants

Example #3: Blended Functional and Funding PortfoliosAligning needs with funding opportunities

Focus investment into core campus facilities that are unlikely to receive donor funding

Example #4: Balancing Needs & Program Value

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%Net Asset Value Index

Academic Admin & Support Athletics

Residence Student Life Transitional

Understanding the Net Asset Value Index

NAV Index =(Replacement Value-Building Needs)

Replacement ValueX 100

Investment Strategy

100%- 85%

85%-75%

75%-60%

Below

60%

Capital Upkeep Stage: Primarily new or recently renovated buildings w/ sporadic building repair & life cycle needs; “You pick the projects”

Repair and Maintain Stage: Buildings are beginning to show their age and may require more significant investment on a case-by-case basis

Systemic Renovation Stage: Buildings may require more significant repairs ; large-scale capital infusions/ renovations are inevitable; “The projects pick you”

Transitional/Gut Renovation/Demo Stage: Major buildings components are in jeopardy of complete failure. Reliability issues are widespread throughout the building.

NAV of Index

Technical Assessment

Step1: Integration of Capital Needs

Step 2: Create Building

Portfolios

Step3: Develop Multi-year

Capital Plan

Step 4: Project

Selection

What is the Impact?

Highlight Value of Each Project

Define WorkClassification

• Repair/Maintenance• Modernization• Infrastructure

Define ProjectTimeframe

• A: 1-3 Years• B: 4-7 Years• C: 8 -10 Years• X: Beyond 10 Years

Define ProjectClassifications

• Reliability• Asset preservation• Program improvement• Economic operations• Safety/Code

What is the Work?

What is the Impact?

When should the work be

done?

Academic / Admin

Student Life

Repair Infrastructure Renovation Houses

$20M Plan $ 2,118,600 $ 4,891,000 $ 7,555,600 $ 1,384,700 $ - $ 271,514 $25M Plan $ 3,368,600 $ 6,540,600 $ 8,055,600 $ 1,734,700 $ - $ 319,094 $30M Plan $ 3,497,100 $ 7,754,900 $ 7,555,600 $ 2,055,800 $ 3,405,555 $ 819,094

$(1)

$-

$1

$2

$3

$4

$5

$6

$7

$8

$9

Mill

ion

s

$20M Plan $25M Plan $30M Plan

Acad/Admin Student Life Repair Infrastructure Renovation Houses

Planning Options Summary

Portfolios

Select Projects that Support Plan

Full Inventory of Projects Apply

Building Portfolio& Timeframe

ApplyInvestment Criteria &

Timeframe

Multi-Year Project Plan

Geographic, Program, Transitional, & Years

Reliability, Asset Preservation, Program, Economic Operations,

Safety/Code & Years

Pro

po

sed

So

luti

on

Electrical, Plumbing, HVAC, Mechanical, Exterior, Interior,

Safety…

How Do You Target

Projects

Full Inventory of Projects

Electrical, Plumbing, HVAC, Mechanical, Exterior, Interior,

Safety…

?C

urr

ent

Ch

alle

nge

Pick Projects

Tips for Communicating the Plan to Leadership

Don’t provide an overwhelming list of needs without a framework

Don’t get caught up in specific technical details

Don’t turn your list of conditions over to someone else & move on

Don’t deliver the list as an ultimatum

Do make sure your list is framed and targeted

Do gather details, but focus on the macro level and outcomes

Do stay involved and work with stakeholders throughout

Do recognize there will be continual prioritization

Articulate the Cause of Backlogs

Communicate a Credible Inventory of

Need

Create a Process;Don’t Just

Pick Projects

Measurable Performance

30

• Catch-up vs. Keep-up

• Understand how underfunding creates backlog

• Impact of changing campus age

.

• Comprehensive, credible, and flexible

• Illustrate operations impact

• Benchmarking for context

• Building Portfolios reflect institutional strategy

• Investment Criteria define the investment outcome

• Timeframe – aligns financial capacity to facilities needs

.

• Fact: Never get enough funding

• Fact: Emergencies arise so contingency management is key

• Fact: Customer support is important

Conclusion

• The Successful Plan Will:

Update the Plan as Needed

Facilities

Assessment &

Planning

Process

CodifyThe

Needs

CreateStrategy

AllocateResources

Selectthe

Project

Execute the

Project

MonitorProgress

New Goals orPriorities

DefineExistingNeeds

Read the Full Guide For…

Download a copy todayhttp://www.sightlines.com/insight/planning-for-the-future/

• Meeting Future Workforce Challenges• Building Flexibility into Long-Term Planning

Q&A

jpearlman@sightlines.com

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