Should You Buy That School Based on Facilities?
The appetite for investment in schools worldwide seems unabated. But should you buy that school based on facilities?
There are five key elements that should be used to gauge the viability of a school purchase. Financial Position, Management, Market Growth Potential, Facilities and Valuation. Should you buy that school? We will share our key criteria and measures over the following series of 5 blog posts to help you narrow down the field.
Should you buy that school based on facilities? You need to be careful of the traps that might be hiding under the surface. You also may have some golden opportunities or quick-fixes that make the school more valuable than you thought.
Street Appeal and Branding
We all know that first impressions count. We believe that the schools vision and mission, its brand and identity, should be apparent as soon as possible. From the first interaction we should be clear about the message we are sending new parents. The facade of buildings, landscaping as well as signage can make a big difference. A school that describes itself as “welcoming”, “prestigious”, “safe”, “caring and supportive” can sometimes contradict itself. There can also be significant impact created by a school that invests in facility branding as well as way-finding systems.
The uninitiated may not realise this but It is impossible to achieve 100% classroom utilisation when juggling complex student schedules and classes of varying sizes at different grade levels. In practice it may be possible to achieve around 85% utilisation or higher, but only by balancing a number of different factors. You can achieve high ratios with good school design but also there is an art to scheduling strategies as well as making space purposeful. It is of course even more crucial at secondary level. You need to analyse the current space utilisation and look for ways to improve it. Increasing or maximising capacity is important. There may also be ways to expand if local laws and existing design allows.
We highly recommend beginning the process with a school facility audit. This comprehensive review is the standard method for establishing baseline information about the components, policies, and procedures of a new or existing school facility. A primary objective of a facility audit is to measure the value of an aging asset relative to the cost of replacing that asset. Thus, facility audits are a tool for projecting future maintenance costs. Facility audits are accomplished by assessing buildings, grounds, and equipment; documenting the findings; and recommending service options to increase efficiency, reduce waste, and save money. Thus, an audit provides the landscape against which all facilities maintenance efforts and planning occur. A facility audit is a data collection process, pure and simple. It should include data on all facilities, infrastructure, grounds, maintenance staff (e.g., specialized training courses attended), and equipment (including boilers and HVAC systems), floor finishes, plumbing fixtures, electrical distribution systems, heating and air conditioning controls, roof types, flooring, furniture, lighting, ceilings, fire alarms, doors and hardware, windows, technology, parking lots, athletic fields/structures, playground equipment and landscaping, and the building envelope. Other issues to consider during an audit include accessibility, clean air, asbestos, fire, occupant safety, energy efficiency, susceptibility to vandalism, and instructional efficiency. Should you buy that school based on facilities might be better phrased as are the facilities sound and can they be improved in a cost effective way?
Should You Buy That School Based on Facilities? Only after you have completed a comprehensive facility audit.
Buying a school is a big investment. Before a purchase is made it is essential that a comprehensive building inspection is completed to highlight the true condition of the property and facilities and the costs required to repair them short term, or long term.
It is essential that a comprehensive and credible inspection is conducted by technical personnel capable of identifying major deficiencies in buildings and the range of school facilities. The inspection should not be based only on observations of visible and apparent condition of the school building and its components
Key areas for inspection should include:
- Building exterior
- Building interior
- Furniture and equipment.
Structure and Roofing
The structure of a school building refers to the main components of columns, beams, structural walls, floors, and roof structures. Many school buildings will naturally develop small cracks in the concrete columns, beams, structural walls, and floors. In most cases, this is a normal part of the structure settling in its original foundation. However it needs to be checked. Through advice from a trained professional, you may require further evaluation by a structural engineer.
Pay special attention to these aspects:
- Warping in columns, beams, structural walls, floors, and roof structure
- Rotting in wood structural components
- Rusting of metal structural components
- Roofs with damaged ridge caps or flat roofs affected by blocked drainage systems
The types of structural matters are very important to review before you buy a school based on facilities.
Most modern school buildings have exteriors that require little maintenance but the exterior will still need a periodic maintenance programme to protect the materials. The specifics of the programme will depend upon the materials used and their current condition. The biggest threats of the school building’s exterior are water, wind, sun, and in areas near the coast, salt damage.
Besides paint, maintenance of interior masonry walls usually is minimal unless cracks are visible. Horizontal cracks might indicate great pressure against the wall from the outside. A vertical crack, or one that is stair step, is likely caused by differential stress along the base of the wall. It may result from simple settlement of the school building on its foundations and footings or something more serious. If there is a hairline crack where the walls join other elements, just resealing and repainting ought to do the trick.
Windows, louvres and doors should open and close easily. If they don’t, investigate any substantial movement in the school building. The same issues can cause ceilings to sag. Also investigate water leaks that can cause deterioration in key structures.
Most of a school’s plumbing has five major parts: water supply, water storage, fixtures, waste collection, and septic system. Water is provided either by a public system or a private well, and the water storage could be underground or elevated. The distribution of water in as well as the systems to distribute waste out of the building should be checked thoroughly for any fault. This also includes venting of sewer gases. All fixtures that serve the distribution system should also be in sound condition.
The school’s electrical system is somewhat similar to the body’s nervous system, with a brain (electrical panel box) and nerves running throughout the school building. Inside the panel box, main power lines bring electricity into the school, and branch lines (circuits) take electrical power to other parts of the school. A technical expert should check that all systems are well maintained and that the electrical load is adequately servicing all areas of the school.
In all areas of the school maintenance needs to keep a watchful eye for conditions that may cause tripping hazards or water drainage toward the school buildings. Any tripping hazards should be eliminated to a safe standard.
Driveways and parking lots require some degree of maintenance. Concrete or asphalt driveways may experience sinking, or the surface can crack due to settlement and water. The driveway elevation should be below the school building floor so that rain will drain away from the school building, not into it.
Particular attention should be paid to the direction of the water flow in heavy rain. Flood proofing techniques are used to reduce flood damage to the buildings by direct water away. Retaining walls should be checked for deterioration. They will be affected by excessive pressure built-up behind them, root pressure or from general movement of top soil.
Gardens and turf can require varying levels of maintenance including water. The quality, type and design should be reviewed and considered.
Furniture, Fixtures and Equipment
Furniture, fixtures, and equipment (abbreviated as FF&E or FFE) refers to movable furniture, fixtures, or other equipment that have no permanent connection to the structure of a building. These items, which include desks, chairs, computers, electronic equipment, tables, bookcases, and partitions, typically depreciate substantially over their long-term use.
By keeping appropriate records and identifying valuable items of school equipment and
furniture, losses can be minimised and the value of the assets can be used to deliver
educational services for the school. These records can be reviewed in general to determine their current value, replacement value and considerations for depreciation.
On inspection consideration should be made about the quality and types of materials used in construction or fabrication of FFE. Different countries have different quality standards for manufacturing. This may impact on the equipments life as well as health and safety concerns. eg. Toxic plastics and paint.
Building inspectors review many documents during the inspection process. They may review previous appraisals, building plans, previous citations, certificates of occupancy, licenses, construction permits, evacuation plans, environmental studies, fire safety system records, floor plans, maintenance records and surveys. These records will reveal the true cost of owning the building short and long term and help you as an investor determine the true value of the property.
An inspector’s findings will be compiled in a final property condition report (PCR). The report will feature written evidence of observations, as well as photos for clarification. The report will also include any recommendations from the inspector on how to conduct corrective action or request follow-up testing by a specialist. In most cases there will be a cost estimate for repairs and future replacements. This document is a very important part of your decision making process.
All schools should also have a comprehensive asset management plan that can be reviewed on request. An asset management plan serves as the cornerstone for an effective asset management system. These plans provide a road map for organisations to understand their objectives and long-term asset management strategy.
It is essential that you review documentation using technical experts before you buy a school based on facilities.
Evaluating current maintenance plans is essential as there are a number of factors that can contribute to a “maintenance gap”. They include insufficient funds, poor management of funds and provision that do not match educational needs. Poor maintenance increases running costs, such as for energy and cleaning. Reducing energy consumption can help not only to save money but also to reduce carbon dioxide emissions help the school become more sustainable.
Other consequences of poor maintenance are:
- deterioration of parts of the building;
- an unsafe and unhealthy environment;
- a lower quality of teaching and learning;
- a lower quality of living;
There are educational, social and environmental advantages of good maintenance:
- educationally – the condition of the environment indicates society’s support for education;
- socially – it sets an example to pupils, that the environment in which we live should be
- environmentally – good maintenance promotes the aims of education.
Should You Buy That School Based on Facilities?
There are five key elements that should be used to gauge the viability of a school purchase. We will share our key criteria and measures over the following series of blog posts to help you narrow down the field.
Who is Global Services in Education (GSE)
Global Services in Education is a full service education management company led by education experts. They are proven education and business leaders who know how to set up and manage international schools in unique cultural contexts. GSE lead education projects from the initial idea to set up and full management. Kindergarten, Primary, Middle and High School, Universities and Adult education.
School Acquisition: GSE represents investors looking to acquire schools or evaluate potential of school group expansion.