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Increase Your Buildings NOI by 13.9% with ICF Construction

A sample cost analysis comparing the expenses of building a hotel with wood versus using Insulated Concrete Forms (ICF) and concrete reveals the advantages of the latter option. The analysis was conducted for a speculative four-story hotel in Richmond, Virginia, comprising 88 units, a gym, offices, and support spaces. The estimates show that the concrete building offers 13.9% higher operating income due to energy and insurance cost savings, reduced vacancy, and enhanced occupant comfort. Additionally, ICF and precast plank flooring result in a 6.6% cost reduction compared to wood framing, while ICF and composite concrete floor decking offer a 10.6% cost reduction. Benefits of ICF construction include expedited schedules, superior energy efficiency, increased sound attenuation, higher owner income, and reduced insurance costs.

Increase Your Buildings NOI by 13.9% with ICF Construction

I recently came across a sample cost analysis that compares the cost of a hotel built with wood vs. the same hotel built with ICF and concrete. It confirms that if you build with Insulated Concrete Forms (ICF) you can increase your NOI by reducing energy and insurance costs and providing a more comfortable occupant experience.

Here is the recap:

A comprehensive cost estimate was conducted for a speculative four-story 41,250 square foot hotel located in Richmond, Virginia. The building consists of 88 units, a gym, various offices, and ancillary support spaces. The cost estimates were conducted for wood frame construction and concrete construction.

Operating Income Estimates

Operating income for the concrete building is 13.9% higher because of savings for energy costs, insurance, and reduced vacancy because of reduced noise, increased thermal comfort, and lower rent plus utility costs. The highest net operating income is for the concrete building affording the owner the opportunity to charge typical room rental rates while incurring minimal utility costs.

Up Front Cost Summary

Wood Framing vs. ICF & Precast Plank vs. ICF & Composite Concrete Floor Deck

ICF (Insulated Concrete Forms) and Precast Plank Flooring offers a $542,401.71 savings or a 6.6% cost reduction over the use of a wood-framed structure. ICF and Composite Concrete Floor Decking offers an even greater savings of $927,243.68 or a 10.6% cost reduction over Wood. The benefits of using ICF are not limited to a substantially reduced upfront first cost only. Some of the other realized benefits are as follows:

  • Expedited construction schedules (10% to 15% over other structural systems)

  • Superior energy efficiency will allow the building to save as much as 15% to 25% on the cost of HVAC equipment due to the reduction in the heating/ cooling loads, resulting in an ROI evidenced by monthly utility costs being reduced as much as 30% plus

  • Increase sound attenuation, improving the occupants experience (STC rating of 55+)

  • Increased owner income (see Section “2. Owner Income Estimate”)

  • Builder’s Risk and Owner Liability Insurance can be reduced by as much as 35% to 50%

For a copy of this 45 page report including budget numbers and case studies, you can visit our website and download the report.

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