The cost of waiting: Deferred maintenance is now a business risk

As multiple reports have warned, America’s infrastructure is aging. The average age of public-school buildings is 49 years. U.S. commercial buildings are, on average, 58 years old.

To put those numbers in context, buildings become candidates for major renovation, additions, and structural changes after 40 years. After 50 years, hidden distribution systems (such as HVAC, electrical, and plumbing systems) start to fail completely.

Deferred maintenance has a way of becoming deferred risk. Necessary repairs get postponed because the budget is not there, because something else came up, or because nothing has broken yet. At some point, the cost of waiting is higher than the cost of acting.

When people hear "modernization," they tend to picture robots and AI (both important tools in future-proofing facilities), but for most facilities, modernization starts somewhere more fundamental: with deferred maintenance debt that's been quietly building up. Energy inefficiency, emergency repairs, and shortened asset life are costs that compound slowly, then land all at once when something fails. No building technology can deliver its full value on a neglected foundation.

That's what this two-part series is about. We'll look at why deferred maintenance has become a genuine business risk, how to build a modernization strategy that actually addresses it, and how to set your facility up for what's coming next: electrification, resilience, and better operations across the board.

What deferred maintenance actually costs

According to the government’s assessment, the total cost of the nation’s deferred maintenance was at least $1 trillion in 2019.

Deferred maintenance might seem like a facilities problem, but building owners will pay the price for failing to make critical updates in a timely manner. According to the Building Owners and Managers Association, repair and maintenance account for roughly 12% of total expenses. Of this, preventative maintenance accounts for 3.6 to 6% of annual operating costs.

The cost of postponing repairs compounds quickly. Benchmarks estimate that deferred maintenance costs compound by 7% per year. Aging HVAC, electrical, lighting, and controls systems quietly drain energy budgets and compress asset life.

According to ABM’s Facility Engineering Services,

• Regular HVAC maintenance can reduce the risk of breakdowns by 95%.
• Well-maintained chillers are 30% more efficient than unmaintained ones.
• US businesses lose $4 billion each year due to inefficient electrical systems.
• Two out of three facility managers say plumbing is the most vulnerable system in older buildings.
• It costs $5,000 per minute when mission-critical infrastructure suffers an outage.
• Poor maintenance increases the risk of electrical switchgear failure by 25%.
• 83% of workers cited reliable infrastructure as an important factor in their ideal workplace.

When something fails, the cost to fix it is more than just financial. Not only is it significantly more expensive to address an unplanned failure than to make a planned upgrade, but it also leads to unhappy tenants, lost productivity, emergency labor, and other disruptions.

Ultimately, deferred maintenance might feel like a way to save money in the short-term. However, it leads to an even bigger financial outlay down the road. It's not about whether you're spending money on infrastructure: it's about when and how.

Three risks of deferred maintenance

Deferred maintenance creates several problems, often at the same time. Here are the three that come up most in budget conversations.

Operational risk

A building that's too hot in August. A lighting system that flickers out. An elevator that goes down during peak hours. These are not just inconveniences, they're disruptions that affect productivity, occupant experience, and the reputation of everyone responsible for keeping the building running. Aging systems don't fail on a schedule, and this creates an operational problem that touches every part of the business the building supports.

Financial risk

Bottom line: reactive repairs cost more than planned ones. If deferred maintenance costs compound at roughly 7% per year, and repair and maintenance already account for about 12% of total facility expenses, it’s clear that these costs are untenable. Meanwhile, aging HVAC, lighting, and electrical systems quietly inflate energy bills month over month, costs that a planned upgrade would have eliminated.

Assets that could have been maintained and extended get replaced sooner than necessary. Capital that could have gone toward strategic investment goes toward emergency spend instead. As Richard Phelps, ABM's Regional Vice President of Infrastructure Solutions, frames it: "You're not avoiding the cost. You're just choosing when to pay it — and the later you pay it, the more it costs."

Compliance and resilience risk

Climate volatility is turning what used to be edge-case weather events into baseline planning assumptions. For buildings with aging infrastructure, deferring maintenance is not only expensive, it's dangerous.

Facilities that haven't been modernized are increasingly exposed to compliance issues and natural disasters. Aging infrastructure is less equipped to handle grid stress, extreme heat, or extended power disruptions. They are also less able to meet the energy and emissions benchmarks that regulators, boards, and tenants are increasingly requiring.

Resilience, in this context, is not just about surviving a crisis. It's about maintaining continuity when conditions get difficult and demonstrating to stakeholders that your facility is built to do that. Deferred maintenance makes both more difficult.

How to move from reactive maintenance to strategic planning

Most facilities don't fall into deferred maintenance by choice. They fall into it because there's no roadmap, just a series of decisions made under pressure, one budget cycle at a time. A roof gets patched. An HVAC unit gets repaired instead of replaced. A lighting upgrade gets pushed to next year. Then next year becomes the year after that.

If the risks of deferred maintenance are high, the benefits of moving to preventative maintenance are even more compelling.

Know what you’re working with

Shifting away from reactive maintenance to proactive planning starts with a systematic look at the state of your assets, their remaining useful life, and where the gaps are. Ashley Bradarich, ABM’s Director of Business Development, notes that most facilities are operating without a complete picture. Facilities teams don't really know what's happening with their assets. Nothing is tagged. Procedures aren't written. When something breaks, it creates chaos.

A condition assessment changes that. It creates a baseline: here's what you have, here's what it's worth, here's what it's likely to cost you if you don't act. Not everything needs attention immediately, but everything should be accounted for and assigned a level of criticality. Some systems, if they fail, create an emergency. Others have more runway. Understanding that distinction is what allows you to prioritize intelligently rather than reactively.

Build a roadmap, not a wish list

A condition assessment is only valuable if something is done with the data. That's the step many organizations are still working on.

"A lot of clients are taking facility condition assessments seriously — they recognize that they don't know what's happening with their assets. The next step, which I haven't seen enough of yet, is what they're actually doing with that data," says Bradarich.

Ideally, the assessment results in a multi-year capital roadmap: a living plan that connects asset condition to budget, prioritizes investment by risk and impact, and gives finance and operations a shared view of what's coming and when. This is the shift from patching to planning, from reacting to individual failures to managing the facility as the strategic asset it actually is.

ABM Connect^TM supports this shift directly. The data intelligence platform's capital planning tools allow operators to track asset health scores, remaining useful life, and budget against actual spend, giving clients the visibility to make decisions well ahead of a failure. As Manas Malik, Senior Product Manager for ABM Connect, explains, "We want to be more of a partner to the client versus just servicing their assets. An OEM might tell you an asset should last ten years. We can tell you it's likely to have eight and a half years of remaining usable life, so you need to adjust your budget accordingly."

Prioritize what matters most

A good roadmap doesn't treat every asset equally. It reflects criticality, the systems where failure has the highest operational, financial, or safety consequences, and sequences investment accordingly.

It also creates the documentation trail that makes the business case internally: not just "we need to spend money on infrastructure," but "here's exactly what we have, what it's costing us, and what a planned investment will return."

Once you know what you have and what you need, a financing structure like ABM’s Infrastructure-as-a-Service (IaaS) can help fund necessary upgrades through the operational savings the upgrades generate, turning what feels like a capital expenditure into a self-funding investment.

Richard Phelps, ABM's Regional Vice President of Infrastructure Solutions, explains, "You have trapped capital within your existing operating budget. The means to do this are already there." The work is unlocking it.

ABM’s IaaS develops a custom plan that aligns with each site’s financial structure, ownership preferences, and desired sustainability outcomes. The ABM team also executes the plan, minimizing disruption with zero upfront capital required.

Moving the needle on deferred maintenance doesn’t have to require a significant increase in spending. It simply takes the right prioritization and the right partner.

The future outlook: moving toward modernization

The math on deferred maintenance is clear. Every year of inaction adds to the bill through compounding costs, degraded assets, and systems that are increasingly unable to support the business's needs.

The facilities teams that get ahead of it aren't spending more. They're spending smarter, on their terms, with a plan that connects today's decisions to tomorrow's outcomes.

The goal isn't just to stop the bleeding, but to build a facility that performs. The goal is modernization.

The grid is changing. Electrification is accelerating, EV fleets need charging infrastructure, and on-site energy generation and battery storage are moving from nice-to-have to necessary. Smart building technology is maturing fast. All of these capabilities depend on strong facility infrastructure.

Ultimately, facilities that address their deferred maintenance debt are positioned to take advantage of what's next. In part two of this series, we'll look at what it actually means to build for the future: how modernized infrastructure enables electrification, strengthens resilience, and creates the platform everything else runs on.

Learn more about ABM Connect and how it can help move the needle toward modernization.