Life Cycle Cost of Building Ownership
Figure 7 shows the total overall cost of ownership of
a typical office building over a forty year life cycle. It is interesting to note
that the initial costs are only one half of the total cost. For buildings that
are more labor intensive in their operations, such as airports and hospitals,
the capital cost fraction may be less than 10%. Conversely, for buildings such
as museums and churches, the proportion is much higher.
Figure 7: Cost of Ownership
Consequently, focus only on initial cost without regard to the present value of future maintenance and operating costs is often a serious shortcoming in the programming, planning and design of facilities.
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Stages of a Value Management Design Review
