Future of HVAC and industry supply issues.

[milkman636]

We’re 2 months farther down the road from the last update. Was the decision made for a permanent fix yet? Or are things still undecided?

 

[ultrarunner]

Status quo with no decision until we know if this location will close June 2024.

Basically everything having to do with facilities is on hold...

 

[milkman636]

so, about 9 more weeks have passed @ $4000 per week in rental fees, plus fuel that is being delivered at over $12 a gallon? That's expensive indecision.

It doesn't seem that adding another 30ish weeks of rental and fuel until potentially closing would result in savings either.

The big question is could they end up being responsible for repair/replacement of that unit in the disposition of the property after closing anyway?

 

[ultrarunner]

No... contractually we are not responsible for permitted improvements we installed.

Word has it this site/area has been selected for a transit hub village and if that is the case the property would be leveled.

Crime is also a factor and patients often ask if there are other locations...

11k per week plus fuel for average 12 hours per surgery day...

Air exchanged and filters all good... it's just we lost 30 tons of cooling... and the remaining 20 tons can only do so much depending on ambient temp.

The higher ups spent 12k on attempted coil repair which I strongly opposed but this came from Corp so sometimes speaking up isn't a good thing but it's my nature.

 

[milkman636]

11k x 4.33 weeks per month = $47630 per month plus fuel……all the way until June…….

I’d be speaking up and saying a few things too. I’m curious by nature and would really want someone to explain why that is the most desirable approach.

 

[ultrarunner]

I did explore rent to own... didn't get far...

In Corp speak capital expenditures are frozen pending lease outcome...

Renting equipment is a daily expense?

I'm thinking this will go to the wire with neither side blinking.

Doubling the ground lease at a time when vacancies are all around and SF values are falling 50% or more sounds crazy...

On the flip side a medical center with 6 operating rooms, MRI, CT and specialty sports medics Ortho providers isn't something easily replaced or simple to relocate.

Maybe the owner is also painted into a corner as their debt service costs are projected to double when their debt finance rate resets from 3.5% to 7 or 8% resulting in doubling debt service...?

Who knows... maybe the lender will foreclose and we can buy the place at 50 cents on the dollar or less?

All of the players 30 years ago are long gone and back then opted to maximize cash flow over controlling destiny rationalizing what happens 30 years down the road is of little concern...

I was the fly on the wall at all the partnership meetings for 33 years as the facility guy...

 

[Sigarms]

Next year will be very interesting.

It has been finalized that there will be no sell through on R410A equipment starting January 1st, 2025.

There is a loophole if you aren't replacing the entire system and replacing one piece of a split system for a repair vs a replacement, but that could be even a bigger quagmire to navigate vs the inspections department.

R454 (most major brands) will be used, with Daiken using R32, Trane is going to be using something else (escapes me now) that is basically R454B but with their name on it or something like that.

Reality is manufacturers will have to plan on a conversion prior to 2025, which means next year. NO ONE will want to be stuck with inventory that they can't sell at the end of 2024.

When it you think about it, this is like the auto industry having 95% of their vehicles gas or diesel, and the government telling them that they have to go 100% electric 14 months and any gas or diesel vehnicle would be illegal to sell after that date.

R22 equipment had a sell through, as well as all the efficeny changes, but not this time.

 

[kenmac]

Next year will be very interesting.

It has been finalized that there will be no sell through on R410A equipment starting January 1st, 2025.

There is a loophole if you aren't replacing the entire system and replacing one piece of a split system for a repair vs a replacement, but that could be even a bigger quagmire to navigate vs the inspections department.

R454 (most major brands) will be used, with Daiken using R32, Trane is going to be using something else (escapes me now) that is basically R454B but with their name on it or something like that.

Reality is manufacturers will have to plan on a conversion prior to 2025, which means next year. NO ONE will want to be stuck with inventory that they can't sell at the end of 2024.

When it you think about it, this is like the auto industry having 95% of their vehicles gas or diesel, and the government telling them that they have to go 100% electric 14 months and any gas or diesel vehnicle would be illegal to sell after that date.

R22 equipment had a sell through, as well as all the efficeny changes, but not this time.

wouldn't it be great if we could get someone in there to crush all the stupid agendas these idiots are pushing ?
They should all be taken to the train station !
I'm so glad I don't have to deal with these fools anymore !

 

[ultrarunner]

It's a sad commentary on the times we live but it's something I hear more and more... the joy of not havi g to deal with regulations and continual jumping through hoops and upset customers...

HVAC, Landscape Equipment, Diesel Tiers, etc...

 

[Sigarms]

It's a sad commentary on the times we live but it's something I hear more and more... the joy of not havi g to deal with regulations and continual jumping through hoops and upset customers...

HVAC, Landscape Equipment, Diesel Tiers, etc...

It's worse IMO for HVAC.

Could you imagine if the government informed all car manufacturers that by the end of 2024 it would be illegal to sell a car that runs on gasoline? (basically a 15 month notice)

Don't get me wrong, the HVAC industry knew this was coming, but as mentioned before, this is the first time the government isn't allowing a "sell through" of existing inventory.

I don't like to play games, but the loophole they are allowing per "service" vs "install" may become a reality. In essence, your making a law that people can skirt around because you know the new law is impossible to meet per the timeframe given. That said, for commercial package units, don't think there is skirting around any law per a loophole because it's not a split system.