Will ‘ultra-high-rises’ cost more to maintain?

Higher per-unit expenses predicted in condo buildings 50 storeys and up
Thursday, March 15, 2018
By Michelle Ervin

The new and growing crop of buildings rising 50 storeys and up in Toronto will be more complicated and consequently more costly to maintain, one engineer is warning. She is not alone in her assessment.

But at least one major developer is not convinced that the people who buy units in buildings of this height will automatically pay a premium for upkeep. Its president says ease of maintenance very much factors into the design and construction of tall multi-residential towers, and he points to concrete examples of how.

If others are less interested in thinking through how end-users are going to repair and replace major equipment, there is nothing in the Ontario Building Code that would force them to — yet. A guideline for building durability that is due to become a standard could establish design requirements for maintainability.

In the meantime, however, condo corporations governing existing buildings of 50 storeys and up have to fund the reserve accounts used for major repairs and replacements based on current conditions.

Tall towers raise access issues

Speaking at the Condo Conference last fall, Sally Thompson, managing principal at Synergy Partners, flagged design decisions in tall multi-residential towers that she predicted will, at best, inflate repair bills and, at worst, introduce ‘inconceivable problems.’

Consider the case of a heat exchanger, two storeys in height, located on the 50th and 51st floors of a 70-storey building. What happens when it needs to be replaced?

“It’s not on the roof; I can’t bring a helicopter in and pluck it out,” said Thompson, speaking last fall. “I somehow have to extract it from the side of the building, and so I don’t know how you do that.”

Reflecting in a later phone interview, Thompson recalls first encountering such challenges a few years ago, when ultra-high-rise condos began coming onto the market. Since then, she has observed other examples of large equipment in awkward locations, as well as rooftop cranes with inadequate capacity.

“If I have 500-pound capacity on the suspended stage and 250 on a hoist, that’s two guys, some hand tools and one piece of glass,” said Thompson, speaking at the industry conference. “And, to give you context, it takes half an hour or more to drive the crane up or down the building.

“And, to give you some more context, these cranes have mandatory wind speed limits, which means you basically can’t run them from October to April in Canada.”

She said she foresees condo corporations having to rent mast climbers — large platforms that scale buildings from ground level — to conduct major retrofits on the exterior of ultra-high-rises, which could otherwise stretch into years if the work is being done using a single stage.

Higher per-unit costs predicted

Extra costs such as this may be shared across a greater number of owners in ultra-high-rises, but Thompson expects to see higher per-unit costs in these buildings — a view Dale Kerr, senior principal at Pretium GRG Building Engineers, shares.

“Of course, there will be more units in a higher building, but I suspect many of them tend to be luxury condos, with larger units, so there won’t be a large enough increase in the number of units to offset the likely increased maintenance costs on a per-unit basis,” said Kerr.

As a rule of thumb, condo corporations need to contribute $2,000 to $3,000 per unit per year to their reserve fund, said Thompson. By way of contrast, she pointed to a 65-story condo building that is making annual reserve fund contributions that work out to around $5,000 per unit.

Thompson acknowledged that there are some complex low-rise buildings, which tend to have much larger units, for which condo corporations need to contribute as much as $6,000 to $7,000 per unit per year to the reserve fund. Indeed, Kevin Shaw, manager of building science at Cion|Coulter, observed that it’s not just tall towers that present problems of access when it comes time to replace large equipment, citing the example of underground chillers.

“There’s no way of bringing those pieces out in their original or installed whole capacity — they have to be taken apart,” said Shaw. “And same thing with anything that’s going in — you can’t bring a full-sized chiller back into a P2 (parking level 2) basement.”

He said dismantling and assembling equipment in place is a costlier process than using a crane to swap old equipment for new equipment in one piece, regardless of building size.

Building code quiet on maintainability

The Ontario Building Code is currently quiet on the maintainability of buildings, other than requiring the provision of anchor systems to support window cleaning. However, this could change in coming years. A Canadian Standards Association committee has been given a mandate to convert a building durability guideline into a standard, and is considering incorporating design provisions aimed at facilitating building upkeep.

Standard or no, it’s in Great Gulf’s interest to consider ease of the maintenance for the end-user during the design stage — not only does it develop and construct condo buildings, but it sticks around to manage them after they’re complete.

“As we go taller, we’re now designing systems on multiple levels of the building, so instead of putting everything on the rooftop, we have building maintenance units scattered throughout the verticality of the building,” said Christopher Wein, president of Great Gulf.

Condo buildings have only recently soared past the 50-storey mark in Toronto, and are rising ever higher at a rapid clip, reaching 78 storeys and poised to top 90 storeys soon. Whereas it’s common to see mechanical penthouses on 30-storey condo buildings, this type of large equipment is now located on intermediary floors as condo buildings reach new heights.

“The reason that you disperse the mechanicals throughout the height of the building is, when you’re dealing with heating and cooling fluids, there’s only so much vertical distance that you can pump things in certain directions,” explained Wein. “At a certain point, it starts to become inefficient, so it’s actually more efficient to treat the building as if it’s three buildings, one stacked on top of another.”

That’s precisely how Great Gulf is treating the 92-storey residential tower it’s developing as part of the mixed-use Mirvish+Gehry project slated to rise in Toronto’s Entertainment District. There will be a mechanical floor capping each 30-storey portion, for a total of three mechanical floors, including two on intermediary floors.

Dispersing equipment across several floors makes it possible to use units that are smaller than would be required if one large unit were used, said Wein. And the units themselves break down into smaller components that can be transported in and out of buildings in service elevators designed for that purpose when it’s time to replace them.

Tower segmentation could curb costs

Wein countered the idea that owners are destined to pay more per unit to maintain buildings of 50 storeys and up. For example, Great Gulf is segmenting single towers of substantial size into multiple condo corporations, bound by easements and shared facilities agreements. He maintains the move will bring costs down by staggering and reducing the scope of tasks.

The developer is currently constructing a 46-storey condo building that will have dual identities as Yonge+Rich and 20 Lombard, each with distinct entrances, elevators and amenities. The former, occupying the lower 33 floors, will be governed by one condo corporation, while the latter, occupying the upper 13 floors, will governed by another condo corporation.

As towers grow taller, Wein suggests this move will also have the effect of concentrating any challenges that might come with height in the hands of owners who enjoy breathtaking views.

“Because those are distinct condo corporations, the people who are getting the benefit of living 80 storeys up in the sky are paying the premium for that height,” he said. “But the people down on the 20th floor, who are not enjoying the benefit of that height, are not having to pay for stuff that’s happening at the top.”

Window cleaning offers early insight

Window cleaning may be one of the earliest tests of predictions about the challenges and associated costs of upkeep in ultra-high-rise condos. This biannually recommended maintenance, which typically occurs in fall and spring, has already begun at tall multi-residential towers, after an initial roadblock.

“We’ve had trouble with a lot of our insurers not wanting to insure window cleaning over 50 storeys,” said Jennifer Runyan, owner and manager of Triumph Window Cleaning.

With custom insurance now in place, Runyan said she is allocating four weeks for window cleaning in 65-storey buildings, versus the one week she allocates for 30-storey buildings. Higher insurance costs, extra staffing and time requirements push up the price of this work, especially since workers must be compensated at higher rates to reflect the increase in difficulty of window cleaning at higher heights, she said.

Crews arriving at sites for the first time have also had to spend time familiarizing themselves with the unique built-in swing stages that come with these tall multi-residential towers as opposed to using the standard rentals to which they’re accustomed, said Runyan.

Longer reserve fund studies urged

Meanwhile, Thompson is urging those managing ultra-high-rise condos to give owners more time to pay into the reserve account that funds capital expenditures because of the jump in the magnitude of costs she’s predicting for major work. Whereas replacing windows may have cost up to $5 million in other high-rise condos, it could escalate into the tens of millions in the tall multi-residential towers, she projected.

“If you have a $30-million project coming down the pipe, do not leave those poor owners only 30 years to fund it,” said Thompson.

Based on the commercial real estate experience, Thompson estimates that the windows on ultra-high-rise condos will have to be replaced or refurbished around the 50-year mark. In this case, a 60-year reserve fund study, as opposed to a 30-year reserve fund study, could mean the difference between asking a condo corporation to set aside $500,000 per year and $1 million per year to pay for this project.

The Condominium Act currently requires reserve fund studies to look ahead at least 30 years to forecast the cost and timing of repairing and replacing major building assets. However, recent legislative changes are expected to introduce new regulations that could raise this minimum to 45 years. Reserve fund studies, which have to be updated every three years, help condo corporations budget for big-ticket costs, ensuring enough money is collected from unit owners through monthly maintenance fees over time to fund capital projects as they arise.

Future technology could mitigate today’s challenges

But it’s the experience of seeing buildings go through major repairs and replacements, and comparing estimates to results, that allows the professionals who conduct reserve fund studies to forecast with precision what it will cost to complete various projects. Future advances in technology could mitigate the challenges that loom large today.

“The real solution as we move forward is to continue to invest in technology and continue to invest in innovation around heating, cooling and energy efficiency so that we do end up with smaller, more efficient systems, so that replacement becomes far easier,” said Wein.

Michelle Ervin is the editor of CondoBusiness.

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