RETURN ON INVESTMENT ARCHITECTURE IN 5 QUESTIONS

With his experience and interest in finance, Erik Rossmann, our principal architect, is a specialist when it comes to applying Return on Investment principles to architectural projects. He breaks it down here in 5 quick questions.

1. What is ROI Architecture?

Return on Investment Architecture begins with the understanding that buildings are an investment which’s performance can be measured by financial returns. While the unit of measure and processes to quantify returns vary greatly, they are always present. A few examples of those ROI markers are: the internal cap rate achieved by residential rental buildings, the per unit profits of a condominium, the resale value of a single family home or even a national museum’s ability to generate ticket sales and revenue for other businesses in the city from tourism.

2. What are the advantages of applying ROI principles to architecture?

ROI Architecture incorporates financial return analysis conceptually in the design process as opposed to applying it as an afterthought when cutting costs. This method allows for cost control without running the risk of latter cuts increasing a building’s vacancy rate or lowering its resale value due to a loss in attractiveness or functionality.

3. Why is it important to hire an architect with proven ROI knowledge?

Hiring an architect with ROI knowledge is crucial to maximize the value of your project. He or she will help you achieve the most appropriate balance of performance and economy for your target clientele.

4. Which tools do you use daily to make sure your designs offer the best investment?

I go back and forth between architectural drawings and formulated spreadsheets; they are complementary instruments in design process.

5. What is the top ROI tip you would give to someone starting an architecture project?

Get to know your target clientele, their budget and their priorities in order to taper the design and investment to meets their needs, preferences and limitations. Knowing your clientele will help you establish the markers most important to them and make your project a success.