Abstract
From the perspective of building health monitoring and property management, this research proposes some parametric measures of the capitalization rate, in order to define a range of significant values to be used in a cash flow analysis intended for monetary evaluation in partial building damage assessment. If criteria and methods for appraising partial damage to buildings are widely shared in the scientific and professional communities, the identification of the most appropriate capitalization rate is rather more controversial, and certainly more complex. The proposed approach borrows the logical principles of cash flow analysis based on the yield capitalization approach, considering both recovery costs and loss of incomes when building partial damage occurs. The procedure is a differential valuation that considers a situation before and a situation after the damage, basing on the cost approach and the income approach. In particular, two distinct conditions are considered: the case of recovery interventions and that of improvement.
Highlights
During its lifecycle, civil infrastructure should always meet the safety requirements for which it has been designed
Starting from the presentation of the general concepts about damage and its classification (Section 2), the main methodological issues regarding the assessment of partial damage to buildings are addressed (Section 3), and the topic of the critical capitalization rate is discussed in more detail, proposing the parametric measurement both in the case of recovery interventions (Section 4) and in that of improvement (Section 5), which is briefly discussed in the conclusions (Section 6)
The present study aims to define some parametric measures of the discount rate to use when appraising building partial damage in ordinary circumstances
Summary
Civil infrastructure should always meet the safety requirements for which it has been designed. Structural health monitoring (SHM) refers to the process of implementing a damage detection and characterization strategy for engineering structures In this sense, damage is defined as a change in the material and/or geometric properties of a structural system, including changes in the boundary conditions and connectivity of the system, which negatively affect the building performance [2]. It is a double evaluation that requires an ex ante estimate and an ex post one, requiring financial analysis tools in order to be able to make the comparison This circumstance involves a more specific, more controversial, and certainly more complex issue, referable to the identification of the appropriate capitalization rate to be used in the analysis of cash flows. Starting from the presentation of the general concepts about damage and its classification (Section 2), the main methodological issues regarding the assessment of partial damage to buildings are addressed (Section 3), and the topic of the critical capitalization rate is discussed in more detail, proposing the parametric measurement both in the case of recovery interventions (Section 4) and in that of improvement (Section 5), which is briefly discussed in the conclusions (Section 6)
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