Colorado-Real-Estate-Journal_414122

Page 16 — Multifamily Properties Quarterly — August 2024 www.crej.com REFRIGERATION REGULATIONS T he HVAC industry is poised for sig- nificant changes as new refrigeration regulations at the national and local levels are set to take effect soon. While there are still many unknowns and extensions surrounding the rollout and the compliance deadline, it is expected that these code changes will stand. To successfully navigate these changes in upcoming proj- ects, it is crucial for devel- opers and owners to work with general contractors and engineers who have a comprehensive understand- ing of these changes and their potential impact on various business aspects, including lead times, cost impacts, implementation and equip- ment. The forthcom- ing regula- tions will entail the replace- ment of R-410A refrigerant with either R-454B or R-32, aiming to address concerns related to emissions. This transition is expected to impact building codes substantially and will necessitate adjustments in equipment and manufac- turing processes to ensure compliance. One of the most sig- nificant considerations for owners and developers is the anticipated increase in unit costs. Factors such as mandated consistency across manufacturers and the uncertainty regarding installation requirements pose additional challenges. Moreover, authorities hav- ing jurisdiction are working hard to ensure a seamless rollout despite the difficul- ties they face due to the lack of product data for R-454B units and procedural changes. The impact of these regu- lations will not be limited to new equipment; it will extend to currently installed equipment requiring ongo- ing maintenance and ser- vice expansions. For ongo- ing maintenance, R-410A compatible parts and refrig- erants will be available for a given period, depending on the equipment. For build- out spaces or service expan- sions, R-410A compatible parts and refrigerants will be code-compliant when upgrades do not increase the original design capacity or replace 75% or more of the evaporators and 100% of the compressor racks, condensers, and connected evaporator loads of the existing equipment. As equipment nears the end of its operational life cycle, ownership groups will have to take on more signif- icant build-out changes to meet new code; this trans- lates to higher renovation costs and more downtime for their properties while improvements are made. A general contractor and design partner can provide expertise in identifying R-410A compatible parts and refrigerants and assist in planning build-out spac- es or service expansions to minimize these impacts. Regarding new construc- tion impacts, it is antici- pated that lead times will increase due to the unavail- ability of the new refriger- ant and new equipment, potentially resulting in a 20%-30% rise in costs. Reno- vations over two stories will necessitate additional fire-rated shafts due to the flammability index of the new refrigerant. Consid- erations need to be made regarding the impact on asset values in multifamily properties. HVAC upgrades may be essential to main- tain property values, and a robust mitigation strategy will be crucial in navigating these changes. A proactive approach is necessary to tackle these challenges effectively. This includes adopting a design- assist strategy and engag- ing general contractors and their trade partners earlier in the design/procurement timeline. Furthermore, establishing relationships with general contractors capable of cost-effective HVAC upgrades for existing properties will be a key fac- tor in staying ahead of the game. In conclusion, while the impending refrigeration regulations bring about significant changes, they also present opportunities for growth and innovation. By thoroughly understand- ing the changes, preparing for potential impacts on costs and equipment, and implementing effective mitigation strategies, devel- opers can proactively adapt to the new landscape and continue to thrive in the industry. s mgarigliano@weoneil.com Understand impact of upcoming refrigeration regs Reduce OpEx with Solar + Attract and Retain Premium Tenants namastesolar.com/commercial Mark Garigliano Director of estimating and preconstruction, W.E. O’Neil HVAC upgrades may be essential to maintain property values, and a robust mitigation strategy will be crucial in navigating these changes.