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Three Reasons Why Healthy Building Certification Can Positively Impact the Bottom Line

Health and wellness certifications can drive ROI by attracting and retaining tenants.

There’s been a lot written about green building – and with good reason. Sustainably-built office buildings are not only a good business decision for developers—making properties more valuable and improving NOI due to reduced maintenance and energy costs—but they also have an enormous impact on the environment and climate change. Just as important, however, are the benefits realized by corporate tenants located within green buildings, as well as their employees.

Wellness is one of those benefits. In fact, wellness is deemed to be so important to the commercial real estate industry that in 2017, the Global Real Estate Sustainability Benchmark (GRESB), which evaluates real assets, including real estate portfolios, on their sustainability policies and implementation and provides data to capital markets, launched a health and well-being module. The fact that GRESB – whose investor members represent over $18 trillion in institutional capital—now supports reporting for health and well-being to help investors manage risk is telling. Attracting capital for “green” projects is no longer viewed as strictly a selling point in satisfying an investor’s corporate social responsibility checklist, but it’s also a fiscally smart move.

This is especially true with project that have a strong commitment to health and wellness. From our investment perspective, buildings with certifications such as WELL, Fitwel and RESET are even more attractive, and here are three reasons why:

1. They help building owners attract and retain high-quality tenants and maximize the financial performance of the building (through increased rental rates and resale value). They also improve shareholder relations by increasing GRESB scores for health and well-being. According to a study conducted by CBRE in 2018, wellness is now an essential part of a corporate real estate strategy, with 92 percent of companies surveyed showing a preference for wellness-capable buildings.

Corporate tenants today expect any class-A office building in a major market to be LEED-certified, and many corporations have policies about occupying space that is LEED-certified or otherwise green. Even the federal government has similar requirements. The Guiding Principles for Sustainable Federal Buildings—principles that federal projects are required to abide by—includes a section on occupant health and wellness that reads:

“Where feasible, promote opportunities for voluntary increased physical movement of building occupants such as making stairwells an option for circulation, active workstations, fitness centers and bicycle commuter facilities; and support convenient access to healthy dining options, potable water, daylight, plants, and exterior views.”

2. Wellness certifications help corporate tenants recruit and retain top talent. In a recent survey by the U.S. Green Building Council, 79 percent of respondents said they would choose a job in a LEED-certified building over a non-LEED building. Millennial workers in particular are more values-driven than previous generations, and having wellness certifications is important to them since they spend so much of their lives in a corporate environment. Plus, studies have shown that employees are more productive in green buildings, have lower staff turnover and fewer sick days—and they’re happier.

3. Certifications minimize the risk of incidents and help building owners and corporate tenants mitigate risk. Consider air quality. If a corporate tenant moves into a building, and employees complain of health issues—nausea due to odors from paint, for example—the building owner may face liability, or at least the threat of litigation. However, if the building had a RESET certification, the owner would have a third-party validation for a high level of air quality.

RESET Air continuously monitors indoor air quality by measuring CO2, particulate matter, TVOC, temperature and relative humidity. Monitors can be hard-wired or mobile and resemble a residential smoke detector in shape and size. Results stream to the cloud and can be viewed in real time from any computer or mobile device. So, in a situation where a RESET-certified building owner receives a complaint about air quality, he can point to that certification to demonstrate that he is providing good quality air and that it’s something the tenant is doing in its space to reduce interior air quality. In a world where air quality may turn out to be the next asbestos due to an increase in lawsuits, a certification that interior air quality is safe can be critical to a building owner.

While we must not abandon our goal of creating more energy-efficient buildings, we also need to continue to increase our emphasis on promoting health and well-being for the occupants of those buildings. Wellness certainly benefits the employees who spend so many of their waking hours in corporate environments, but as demonstrated above, it also benefits building owners, investors and tenants when it comes to the bottom line.

John Mlade serves as senior project manager, sustainable and healthy environments, at Chicago-based Wight & Co., an integrated design and delivery firm.

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