TOPIC 4: SOFT COST & LIFE CYCLE COST

What are Soft Costs?

Expenses supporting the project that do not become part of the physical building.

When do most Soft Costs occur?

During predevelopment, before construction starts.

Can Soft Costs continue after completion?

Yes, including ongoing maintenance and insurance.

Four major types of Soft Costs?

Legal/admin, financing, design/development, operational/miscellaneous.

Examples of Legal/Admin Soft Costs?

Permits, legal fees, insurance, and taxes.

Examples of Financing Soft Costs?

Construction-loan interest and loan origination fees.

Examples of Design/Development Soft Costs?

Architecture/engineering, feasibility, surveys, and consultancy.

Examples of Operational/Miscellaneous Soft Costs?

Project management, marketing, and sales expenses.

What is Life Cycle Cost (LCC)?

Total cost of a building throughout its entire lifespan.

What does LCC consider?

Construction, operation, maintenance, repair, replacement, and disposal.

Main purpose of Life Cycle Costing?

Evaluate long-term economic efficiency and project feasibility.

What are Maintenance Costs?

Repairs, servicing, and replacements that prolong building life.

What are Operation Costs?

Day-to-day costs such as cleaning, energy, water, and administration.

What are Occupancy Costs?

Costs related to building use, such as moves, ICT, and catering.

What are End-of-Life Costs?

What are End-of-Life Costs?

LCC Financial/PV formula?

LCC = C + PV recurring − PV residual.

What does C mean in the LCC formula?

Initial construction/capital cost.

What is PV recurring?

Present value of future maintenance and utility costs.

What is PV residual?

Discounted end-of-life/residual value.

Conceptual LCC formula?

Capital + Operating + Maintenance + Disposal − Residual.

What is Life Cycle Cost Analysis?

Analyzing historic cost and performance data for life-cycle costs.

What is Life Cycle Cost Management?

Controlling occupancy costs to maximize value for the client.

What is Life Cycle Cost Planning?

Predicting future costs and planning when work and spending occur.

What is one application of LCC?

Comparing total costs of alternative design components.

How can LCC help with existing buildings?

Decide whether to refurbish, rebuild, extend, or adapt.

How can LCC help maintenance planning?

Determine the most cost-effective maintenance/replacement program.

What can LCC create for building components?

Cash-flow predictions for future maintenance costs.