ASHRAE, HVAC and the Real Estate Market

There’s a very small group of people in the US that are in the HVAC business and own their own building.

We’re all in a little club and know a sad truth.

The sad truth is that the HVAC system in a building offers no value. And when I say zero, it’s $0.00. Any building owner can make their  building a HVAC Taj Mahal, but from a value perspective, they are throwing their money away.

Of course there are operational savings, and that’s the small exception. In my experience, HVAC upgrades of existing buildings start at 6-year payback and head up from there. It’s possible to justify a system upgrade on operational savings, but only when a replacement system is being considered and the costs are evaluated as a difference in cost.

University and Healthcare Buildings may be exceptions, but I doubt it as long as the facilities meet code.

When a building gets appraised, it’s appraised by the acreage of the property, the amount of available warehouse and office space, amenities (overhead cranes, truck docks) and what it’s going to cost to get the building operable. The quality of the existing equipment is only addressed in its likelihood to need replacement.

And while that’s extremely sad, it is an immutable fact.

I confess that I am not an ASHRAE member. (The Membership committee doesn’t need to call me either.) I’ve been to meetings and worked on a CRC, so I’m a deadbeat but not a complete deadbeat.

I would join ASHRAE if they could lobby to get the value of the HVAC system built into the world of appraisals. This seems like a natural progression for the industry. If a system value could be assigned to the appraisal, we would as an industry perform much better and deliver more value.

The very nature of a mechanical engineer is to be good at engineering something mechanical. The engineering that our HVAC industry needs to do is social.

If ASHRAE gets on this, I’m in.

Until next time,