According to the U.S. Department of Energy, almost half of all commercial buildings were constructed before the 1980s, making many of them close to 50 years old. As these structures age and extreme weather events impact infrastructure, leaders are confronted with difficult decisions when costly repairs arise: whether to invest in maintaining and revitalizing an existing infrastructure or build new facilities.

To make informed decisions about building versus buying, facility leaders must adopt a strategic approach based on a comprehensive evaluation of all assets. This includes a cost-benefit analysis of both options and taking hidden fees like maintaining utilities during transition phases into account.

While many facility leaders do not know where to start when faced with this difficult decision, the first step is to clearly define the purpose and the overarching institutional goal of the project.

Why is this decision critical for facility leaders?

Determining whether to invest in an aging asset or initiate a new construction project is not as clear cut as many would like. There are many factors to consider, including community support, funding availability and the current condition of the facility. This decision is becoming increasingly urgent and influenced by many components that often need to be evaluated on a case-by-case basis. Factors like infrastructure deterioration, climate-related disruptions and staffing shortages are raising the stakes for decision-makers on whether to invest in an aging infrastructure or build new.

Additionally, the consequences of letting older assets fall into nonuse can increase safety risks and diminish community values. An abandoned or underutilized building can negatively impact community relations with city stakeholders, but a new build without community buy-in can spark complaints and ongoing opposition.

Ultimately, facility leaders must evaluate which option offers the greatest long-term value and serves the community the best. The goal should be the most cost-effective option that ensures operational resilience, sustainability and positive impact on the community.

Building new facilities

When deciding on the next steps for an infrastructure project, some leaders may adopt the mindset of “out with the old and in with the new.” Building new facilities offers many advantages, including improved operational efficiency and potential long-term cost savings across areas such as energy consumption, water usage and maintenance expenses. Additionally, modern amenities and innovative features implemented into the build can attract people and provide a unique, fresh environment.

When initiating a new building project, facility leaders can incorporate modern designs principles from the ground up, prioritizing sustainability, energy efficiency and smart solutions such as intelligent grid control, sensors and automation. This early-stage involvement allows for greater influence over the facility's framework, which can lead to reduced utility bills, lower environmental impact and streamlined facility management.

However, the decision to build new buildings is not without its challenges and tradeoffs. The upfront costs are significant, covering construction, development, regulatory approvals and permits, among others. As with any large-scale project, delays in construction or approval processes due to unforeseen factors are always possible. Furthermore, there are hidden costs to consider. While the new facility is being built, the old one must remain operational during the transition, which means budgeting for ongoing expenses, such as paying for water and electricity to prevent issues like frozen pipes.

Additionally, gaining community buy-in for new construction projects can be a challenge. Major builds often disrupt daily life and raise concerns about traffic and changes to the local landscape, especially if construction spans months or even years. Securing community buy-in is essential as a lack of support can delay progress, fuel opposition and impact on the projects' long-term integration into the community.

While new construction comes with both benefits and challenges, a thorough evaluation of all key considerations gives leaders the opportunity to bring new, innovative and valuable facilities to the community.

Maintaining & upgrading an existing infrastructure

It is equally important to examine why maintaining and upgrading existing infrastructure may be a more practical and strategic choice for facility leaders.

One of the primary advantages of repairing and maintaining infrastructure is the lower upfront cost, which can make it a more budget-friendly option in the short term. Upgrades can often be implemented faster, minimizing disruption to operations and providing a faster return on investment (ROI) compared to constructing new buildings, which can interrupt daily life. Additionally, existing knowledge of the facility, assets and its issues, such as damage to a HVAC system or outdated equipment, and historical information on past repairs or replacements can inform strategic decisions about funding.

When deciding to invest in an aging infrastructure, there are many additional variables facility professionals should consider, including community influence and perception. If a building holds historical, emotional or cultural value, residents may strongly support its preservation and revitalization. In these cases, upgrades can strengthen community ties, enhance public image and build trust with stakeholders. On the other hand, if the community perceives the facility as outdated, unsafe or no longer serving its purpose, leaders may face resistance. In these instances, transparent communication and engagement are essential.

While there are many advantages to upgrading facilities instead of replacing them, this approach also comes with challenges. Older infrastructure may rely on outdated systems that are not compatible with modern technology, making upgrades costly and complex. Ongoing maintenance expenses can be higher as aging systems typically require more frequent repairs. Additionally, if institutional knowledge about these systems has not been uploaded or digitized to a shared online system, there is a risk of losing critical operational insights when there are inevitably staff turnover.

Deciding between investing in an aging infrastructure or building a new facility is not straightforward, even when presented with all the considerations. How can facility leaders effectively assess their options?

Developing a strategic evaluation framework for decision-making

Navigating this complex decision requires a strategic approach grounded in a thorough evaluation of existing assets, long-term goals and potential trade-offs to support informed decision-making.

A framework that provides a comprehensive view of the current state of assets, projects future needs and aligns with community goals ensures decisions are based on data to reduce uncertainty and guide long-term investment strategies. This framework should incorporate scenario modeling to evaluate multiple investment paths and their long-term implications. By simulating different upgrade and replacement strategies, facility leaders can better understand trade-offs in cost, performance and risk.

The foundation of any strategic decision lies in thorough asset review. Facility leaders must conduct a complete life cycle assessment of the building systems to understand the lifespan of critical components such as electrical, HVAC and plumbing systems. This step is crucial in identifying potential risks, determining when systems are likely to fail and anticipating the financial implications of repairs or replacements.

Rancho California Water District (RCWD), a public agency that provides water and wastewater services to the Temecula, Murrieta and parts of Riverside County, California, USA, used strategic asset management to forecast the remaining useful life of its critical infrastructure. They leveraged componentized meter assembly models and tested various treatment and replacement strategies based on service life criteria, flow rates and meter sizes. By utilizing a “what-if” analysis, they were able to efficiently compare different rehabilitation and replacement strategies. RCWD prioritized investments and identified areas where upgrades or replacements can extend the life of an asset. When looking at an all-encompassing view of assets, leaders can see whether a complete overhaul or new construction might be more cost-effective in the long run.

The power of strong, managed data

Data is crucial to modern asset management. Leveraging modern digital platforms for asset management – such as computerized maintenance management systems (CMMS), enterprise asset management (EAM) and asset investment planning (AIP) platforms – facility leaders can centralize maintenance data, automate workflows and make more informed capital planning decisions. Using these solutions allow facility managers to have an extensive view of their assets and maintenance experts to conduct regular facility audits on their assets. These audits evaluate all physical assets, from HVAC to roofing and offer actionable recommendations for repairs or upgrades. By leveraging both expert analysis and technology, facility managers gain a better understanding of their building's needs, enabling them to make more informed decisions.

The Boston Public Schools (BPS) (Massachusetts, USA) is another example of facility leaders leveraging data from their daily operations to improve facility management. By having real-time insights into critical building conditions, BPS enhanced its ability to track facility needs and submit more accurate, data-backed budget requests. These requests gained stronger support, due to the FM team’s use of data to reduce maintenance costs and optimize resource allocation.

In addition, leveraging public data solutions allows the community to engage with long-term projects, by providing visibility into product updates and decision-making. When deciding whether to invest in aging infrastructure or pursue a new construction project, these data-backed tools offer valuable insights for more informed decision-making and community support.

Cost analysis: Weighing rebuild vs. maintenance

A key component of the evaluation framework to make this decision is a comparative cost model that highlights the costs of new construction compared to the long-term financial impact of maintaining existing facilities. The report should summarize asset expenditures, analyze life cycle costs, and compare the costs of repairing or replacement, factoring in not just construction expenses, but also the operational requirements associated with each option.

When deciding to maintain or upgrade an aging facility, leaders should account for ongoing operational expenses such as energy consumption, staffing and the cost of keeping old systems running while upgrades are underway. Additionally, it is important to consider hidden costs such as downtime, delays and unexpected repairs that can add up over time and impact the budget.

Predictive analytics to predict future needs

Predictive modeling plays an important role in forecasting long-term operational costs when evaluating whether to invest in new construction or aging infrastructure. Tools like AIP software use historical data and predictive analytics to help facility leaders project future maintenance needs and prioritize investments accordingly. The right AIP technology will help them prioritize assets, justify funding, maximize ROI and improve outcomes for both short-term and long-term asset needs. By anticipating future repair and replacement needs, organizations can better allocate their budgets, avoid costly emergencies and ensure assets are properly maintained over time. With predictive maintenance tools, facility leaders gain a comprehensive view that supports smarter decision-making.

Risk assessment: Understanding investment vs. impact

Beyond cost and data, facility leaders must also assess the broader impact of their decisions when investing in aging assets or starting a new facility project. This includes evaluating how their options will affect the surrounding community, local businesses and key stakeholders. New construction may lead to temporary disruptions, while upgrading an existing facility may limit future expansion. By weighing these risks against long-term benefits, leaders can ensure that their decisions align with both institutional goals and community needs.

Climate resilience is becoming an increasingly critical consideration as businesses strive for a more sustainable future. As organizations work to reduce their environmental impact, they must evaluate how each option, upgrading existing infrastructure or building new, aligns with their broader goals for sustainability and long-term resilience. Regardless of the path chosen, facility leaders must ensure the decision supports future growth while minimizing operational and environmental impact.

A structured plan for future growth

A well-structured evaluation framework is essential for facility leaders to navigate the complexities of aging infrastructure and investment decisions. By combining comprehensive asset reviews, predictive analytics and risk assessments, organizations can make smarter, data-driven decisions that align with long-term goals and community needs. The result is a more sustainable, resilient approach to managing infrastructure.

In the end, facility leaders face a tough decision when deciding to invest in aging infrastructure or start a new project. There is no one-size-fits-all solution and each situation could result in different outcomes. By stepping back and evaluating each option through a holistic, strategic framework, leaders can make informed decisions that are likely to deliver long-term value, success, and community growth and support.