The Center for Active Design recently released a study, A New Investor Consensus, The Rising Demand for Healthy Buildings, which set out to determine the impact of COVID-19 on demand for healthy buildings internationally. The research by the Center for Active Design backs up our long-standing hunch that investors recognize that healthy buildings are valuable assets.
Today’s focus on health and wellness isn’t new. Long before COVID had us questioning ventilation systems and viral response, we were looking to the built environment to address cognitive function, social and emotional wellness, and better overall health. In the past thirty years, evidence has been accumulating that reinforces the need for every architect, developer, builder, and owner to consider the health of building occupants.
And while past studies have provided data on the impacts of various design or operational interventions on the workforce, less data has been collected about the actual and perceived financial value of implementing these strategies. Anecdotes and general trend lines show a definite trend toward wellness in buildings and portfolios, but research on the business case built on market demand or financial return has been sparse.
Eric Usher, Head of the United Nations Environment Programme Finance Initiative kicks off the report in a welcome letter stating, “While this study on investor attitudes and perceptions on health and wellness is timely, decades of research have concluded that improving occupant health and contributing to community well-being makes sound economic sense.”
Here are three key takeaways from the report’s findings:
Wellness and COVID response is colliding with increased pressure to publish ESG results.
74% of respondents agree that tracking data is a key priority for integrating healthy buildings into their ESG strategy. In just eight years, the report states, investments using ESG factors more than tripled, and the demand for ESG-labeled products is outpacing supply. While COVID did not create the demand for wellness in ESG reporting – that trend was well underway before March 2020 – it did accelerate it. The availability of wellness-based certifications like WELL and Fitwel make it simpler for organizations to objectively report their wellness metrics in support of ESG programs and reporting.
There is a tangible increase in market value for wellness-certified buildings.
The report references a 2020 study by the Massachusetts Institute of Technology that quantified the value of healthy building certifications, finding that there is a four to seven percent rental premium per square foot when comparing certified and uncertified spaces. Almost 50% of respondents also stated that healthy spaces tended to lease-up faster than standard spaces. Faster absorption and increased rental rates mean real dollars for owners and investors and cannot be ignored.
COVID accelerated the demand for wellness, but it didn’t create it. The demand for wellness will not end when things go back to normal.
92% of respondents agree that the demand for healthy buildings will grow in the next three years across all asset categories. Eighty-nine percent of respondents said that the current demand for wellness is already moderate or strong. So buckle up and get ready to give health and wellness the same attention that you give sustainability and energy performance.
As someone who once built those excel and Argus models for owner developers, I know that these statistics and quantitative metrics can move the needle for skeptics. As sustainability professionals, it is easy to make the connection to generational shifts and the demand for healthy sustainable residential buildings or corporate end-users recognizing that an increase in their knowledge workers’ performance will impact their bottom line and should inform real estate decisions. I’m so happy to see the Center for Active Design and its partners take a data-informed approach to making the business case for healthy buildings because this data will move the needle. Bringing together wellness, sustainability, and climate resilience with business strategy is the best way to make sure we get safe, healthy, resilient, and profitable buildings and portfolios.
Give the report a read – it’s well worth your time.
- E-BOOK: WELLNESS IN THE BUILT ENVIRONMENT
- IT’S NATIONAL EMPLOYEE WELLNESS MONTH – IS YOUR WORKPLACE HEALTHY?
- WELLNESS COMES TO GRESB
- THE MISSING PIECE TO ALL THOSE WELLNESS STUDIES
- WHY ENVIRONMENT, SOCIAL, AND GOVERNANCE (ESG) MATTER IN REAL ESTATE
- FITWEL REVEALS UNEXPECTED STRATEGIES TO IMPROVE OCCUPANT WELLNESS
- FIVE WELLNESS FRAMEWORK ALTERNATIVES TO THE WELL BUILDING STANDARD