Articles
HOW TO MAKE A GOOD ROOFING DECISION BECOME A GOOD BUSINESS DECISION
Alan R. Spaite, P.E., CCPM
At some point in time, the retail center owner or manager will be faced with on of their least favorite decisions: what to do about the roof. In general, roofing is a topic that retail owners and managers know very little about unless they deal with it on a day-to-day basis. Unfortunately, this simple fact explains why roofing continues to be one of the most chronic and expensive problems associated with large retail centers.
THE RIGHT ROOFING TECHNOLOGY
The one thing that we do know about roofing is that there is no cure-all. For may years, the retail center property owners and managers tried to determine who had the best roofing system and the best warranty. Unfortunately, many owners have learned about the limitations of roofing warranties the hard way. This was best described in a recent conversation I had with John Buckner, senior roofing consultant at Simon-DeBartolo. He hopes that "owners realize the realities of roof warranties. They should take a closer look at their protection under the Uniform Commercial Code before they pay for, and accept, any roofing warranties".
It was not very long ago (during the 1960's) that conventional Built-Up Roofing still captured the majority of market share in low-slope commercial roofing. As single-ply membranes began to slowly work their way into this marketplace in the late 1970's, and then modified bitumens in the 1980's, we watched this industry go through the turmoil of market-share transition and growth. During the first half of the 1990's, the dust started to settle and a sense of market-share stability has been developing.
In addition to the trends, past roofing problems should also be considered. For the retail center decision-makers, the architects that typically specify roofing for new construction and the professional roof consultants that deal with many of the roofing projects on the existing centers, there is now a solid historical record on roofing system problems and trends. This can be obtained in a publication titled "Project Pinpoint" and is available from the National Roofing Contractor's Association (NRCA). For the remainder of the 1990's, market shares are expected to remain fairly stable with the majority (80 percent) of low-slope commercial roofing being divided between single-ply, modified bitumen, and built-up roofing. Within these primary categories, it will be up to the roofing specifiers and the retail center decision-makers to determine which specific roofing system matches up best for each project.
Regarding the search for the best roofing system, Buckner believes that "most of the roofing systems in today's market are all good ones. The key, however, is to match the right roofing system with the needs on each particular roof section. For example, food courts and common areas have very different roofing performance requirements that need to be considered when selecting the appropriate membrane".
WORKING WITH ECONOMIC REALITIES
Obviously, there is an expected difference between revenues generated in the retail industry and the dollars being allocated for retail property development and renovation. The owners/investors in this real estate market are scrutinizing transactions from every angle and, because roofing is one of the major expenditures at a retail center, it will certainly be viewed under a financial microscope by these decision-makers. Understanding the financial environment of this real estate is the key in dealing with these economic realities and making a good business decision about roofing.
For the asset decision-makers, these are the times that test their financial skills. When funds become limited, the temptation is to go with low-price solutions in trying to accomplish the same goals with less money. What is needed is an adjustment to obtain the best value for the roofing funds available. For example, if budgets are downsized, it would be more prudent to downsize the roofing projects and phase the work over several years instead of installing lesser quality roofs that are selected because they are cheaper initially and fit your budget. Dealing with the economic realities of asset management requires that the persons involved with roofing, whether it's the asset manager, the roof consultant, or the roofing contractor, clearly understand the financial climate that exists for the decision-makers.
ROOFING DECISION GUIDELINES
Based on both the technologic and financial aspects involved with roofing, the following checklist provides some general guidelines for decision-makers:
1. Take a pro-active role in the decision process:
In a March 1996 article in Professional Roofing magazine, it was noted that building owners made the decision about 60 percent of the time on both the type of roof system and the manufacturer to be used on new construction projects. On re-roofing projects, which account for 70 percent of the commercial roofing market, the roofing decision is made by the owner only about 30 percent of the time. Roofing contractors make the decision the rest of the time. Obviously, there is a lot of room for decision-makers to become more pro-active and have a greater influence on their roofing decisions.
2. Know when to ask for help:
If there is an in-house person who is the technical resource on roofing, then utilize their roofing experience. If this resource is not available, then retain the services of an outside roof consultant.
3. Conduct thorough due diligence:
When it is time to decide on a roof consultant, a roofing system, and a roofing contractor, check them out. Utilize a pre-qualification form, verify financial information (D&B), contact their references, and, if possible, visit one of their projects. Good decision-makers do their homework and recognize the importance of accountability for their actions and decisions.
4. Choose a roofing system that meets your needs:
Before selecting any roofing system, identify the performance requirements. Utilize a checklist (about 20 items) that would establish design factors (i.e., wind uplift and fire ratings, resistance to oils, ease of repair, etc.).
5. Evaluate economic and business conditions:
This is the area that creates the heartburn for most decision makers. Roofing options are a necessity. Develop several roofing strategies that align with the business conditions at the property. In doing this, do not sacrifice the quality needed in good roofing; it will only cost you later.
6. Don't compromise on design necessities:
If the roof will experience heavy foot traffic by HVAC service crews, for example, then make sure the membrane has a high puncture resistance and a protective surfacing. Installing a membrane that does not meet these criteria to simply cut costs creates a long-term problem and expense.
7. Don't accept a warranty in lieu of a good roof:
If you had the choice between buying either a 10-year new roof warranty (which could cost about $.04 per square foot) or investing in a solid technical design and quality assurance during construction, which one would you choose? The next time someone is trying to sell you their roof warranty, ask for a copy and review it with your attorney before proceeding.
8. Partner with good consultants and contractors:
When you find a good company, try to keep them as you partner in roofing. Establish a fair pricing structure on the front end, then keep the focus on value-added services.
9. Develop a 10-year roofing budget plan:
Whether it's the owner, the investor, or a prospective buyer, no one likes expensive surprises. Roofs used to be an "out of sight, out of mind" line item in the budget. Today's asset managers are anticipatory and want to know what it will cost to inspect and maintain their roofs each year, when replacement should be expected, and what will it really cost. In lieu of the five-year plan, the 10-year planning budget is becoming more commonplace as the long-term asset management tool.
10. Maintain the roof to maintain asset value:
When the roof leaks, consequential damages occur (these are not covered by warranties) and the value of the asset drops. Remember, it costs pennies per square foot to be pre-active with roofs versus dollars per square foot to be reactive. By performing annual roof inspections and preventive maintenance, roof service life can be extended, roof leaks and damage are minimized, and the value of the building asset is maintained.
Published in "Shopping Center Business", 3/97.