The attached document is: Exposing the Myth of the 1:5:200 Ratio Relating Initial Cost, Maintenance, and Staffing Costs of Office Building by Will Hughes, Debbie Ancell, Stephen Gruneberg, and Luke Hirst.
Provided as part of the Q&A follow-up after one of our sessions during the 2023 PD Symposium. You can read the response here: https://network.aia.org/discussion/total-cost-of-ownership-panel-qa-recap-on-evans-ratio-post-aia-pdkc-symposium
It has also been copied below:
Total Cost of Ownership Panel Q&A Recap on "Evans Ratio" Post AIA PDKC Symposium
Dear Colleagues.
As one of the champions of the recent AIA Project Delivery Symposium, I'd like to thank everyone who attended and made it successful. We are grateful for your participation. The Q&A sessions were interactive and fun. Unfortunately, we ran out of time. Therefore, I'd like to take this opportunity to respond to the questions left during the session about the Total Cost of Ownership and share the attached article - "Exposing the Myth of the 1:5:200 Ratio Relating Initial Cost, Maintenance, and Staffing Costs of Office Building" - with our audience especially those curious about the Evans Ratio.
Question #1:
Would you endorse the use of the Evans Ratio for calculating TCO, or is there another method you use to estimate TCO?
Speakers' Response:
Evans Ratio is envisioned for the costs of office buildings; hence, the 1:5:200 ratio does not appropriately apply to other types such as the healthcare building that was presented. For more information about Evans Ratio, please see the attached article.
Question #2:
Mark's graph which showed the circles seemed to follow the same idea as the Evans Ratio (which states that initial cost =1: Operating cost = 5: and Business cost = 200)...my research on this suggests that this ratio is overstated or even understated in some cases, but was hoping for a better more accurate method for estimating TCO (perhaps something by business type)
Speakers' Response:
The Evans Ratio, like Grossing Factors, may serve as an order of magnitude reference but should rarely if ever be used for making decisions. The same owner's business case could be applied to a two-story building in Phoenix and an 8-story building in Minneapolis. Their Evan's Ratios and Grossing Factors would be significantly different. Add some in-building parking or shell space and the variation is further impacted. And that's all within the same building purpose. Change the building purpose (Cancer Center vs. Office) and the variations become even greater. One benefit of a technology like Building CATALYST is to calculate the Gross Building areas, CapEx, OpEx, etc. rather than use ratios fraught with error.
We hope you enjoyed the symposium. For those who weren't able to join us live, please note that the AIAU will make them available on-demand for you. Check: https://aiau.aia.org/courses
All the best,
Grace Lin, AIA, CDT, DBIA
2019-2020 Chair, AIA Project Delivery Knowledge Leadership Group
Senior Project Manager, CBRE
Adjunct Professor, Columbia University