Investing in Existing Buildings versus New Construction

According to a recent survey of their clients, Gordian, a building intelligence firm, reported the dollars reinvested into existing campus facilities renovations grew more than 26% year over year in 2023.  That’s good news.

It remains to be seen however if last year’s spike in spending is “a remarkable shift,” indicating that campus leaders are devoting more resources and attention to maintaining their existing facilities, and  that they recognize “the value of physical assets to the campus experience and financial worth.”

 Hopefully this one-year spike becomes a trend because a large gap still exists between need and spending in regards to maintaining facilities. 

New and old buildings have long competed for capital dollars and officials’ attention. While new buildings might grab headlines and win donations, building renovations and the maintenance of existing buildings and grounds can be clues to a college’s underlying financial health. They can also act as recruitment and retention draws or negatives for students, faculty and staff. 

Very few Institutions budget appropriately for the maintenance and recapitalization costs for new buildings over the life of that building and it’s assets. The other dilemma for Higher Education is that we tend to keep buildings in the inventory way past their expected life which accentuates the problem and adds to deferred maintenance and life cycle issues and costs.