Commercial real estate plays a fundamental role in helping business owners create spaces that enable a healthy, engaged workforce—a trend that is growing rapidly, speakers said during an engaging panel discussion on Monday afternoon at the 2022 BOMA International Conference & Expo. In fact, a global study released in March 2021 found that investments in healthy buildings were accelerating, with 89.5% of respondents—representing almost $1 trillion of portfolio investments in real estate—signaling their intent to enhance their wellness-related asset management strategies in the coming year.
But how can building owners and facility managers ensure that their properties are keeping up with regulations, standards and tenant expectations around healthy buildings today and in the future? Four speakers shared a wide range of perspectives and strategies on this topic, saying they can ensure employee/tenant well-being and sustainable business growth.
Moderated by Bill Sisson, executive director, World Business Council for Sustainable Development, the panel was composed of experts from the supplier side, design and architecture, medical and building rating systems, including (from left): Rasha Hasaneen with Trane Technologies; Zach Flora with the Center for Active Design; Supriya Murthy with Arcadis; and Dr. John McKeon of Allergy Standards, Ltd.
The conversation began with the acknowledgement by Sisson that health is much broader than simply occupational health and safety. “It’s about mental health and physical wellbeing, and social and financial wellbeing,” he noted.
With that said, the panel addressed what’s been on every employer’s mind these days: making a business case for getting people back into the office. Flora noted that questions around health and wellbeing are ultimately answered by looking at tenant engagement and satisfaction, and how investing in a building’s operations or even foodservice to improve occupant health can lead to much higher net provider scores.
As many businesses continue to grapple with the fallout from the Great Resignation, Hasaneen pointed out that when people leave their homes to work, they want to be in places where they feel healthy and safe. “The labor market will continue to be tight,” she said, “and tenants will be looking for ways to attract and retain talent to continue to come to work. Everyone in this room needs to elevate their relationship with their tenants to [help them] reach their goals.”
Given that 78% of employees are now knowledge workers, McKeon said how people feel in a space matters because what’s on their mind while they’re working is important. “We’re human beings, not human doings. How we feel in our environment is really important. The highest human resource you have is harnessing the human spirit, and if our environment can harness human capital in the IP business, that’s important,” he suggested.
Hasaneed added that in order for the industry to move the needle, however, the design of healthy spaces must be based in science, and people will need to collaborate more than ever—but it has to make financial sense as well. “It can’t blow up our business case,” she said. “There’s no silver bullet. Every space will have a unique formula to get to that optimization. People who are experts in facilities or design have to come together, and they’ve never had to come together like this before.”
Considering Costs and Standards
In the short term, making the business case for investing in healthy buildings doesn’t appear to add up. However, Murthy noted that when looking at a multi-year horizon, the investment starts to make sense.
“We need to have a unified, holistic approach to healthy building practices,” she observed. For example, the long-term costs of employee absenteeism, workers’ compensation and insurance claims—as well as the mental health of employees—due to poorly designed and managed buildings adds up over time. In other words, you can’t simply look at the physical and mechanical costs of doing business; it must be tied to human health. And when an investment like more frequent air exchange in the building leads to higher employee productivity, clients and tenants will start to better understand the investment, Flora noted.
“The focus on ESG is bringing together metrics that your clients have historically kept separate,” Hasaneen pointed out. For example, HR metrics have been siloed from energy metrics, “but that’s changing,” she said. “As reporting around ESG starts to mature, they’ll have to look at those investments together and figure out where to invest” for the best possible outcomes for employees and operations.
The challenge for facility executives is sorting through information on IAQ, for instance, which is a highly unregulated space. Regulatory bodies like ASHRAE are in the process of putting boundaries in place to help level the playing field, but the process of developing standards takes time because their impact on investments is in the billions of dollars.
“It’s not an easy equation to solve; however, there’s been more innovation in this space in the last two to three years than there has been in the last 10 to 20,” Hasaneen said. “What gets measured gets managed, and what gets managed gets innovated. Right now, regulatory bodies are simply putting guardrails up.”
Flora added that as voluntary rating systems like Fitwel and LEED address issues like IAQ, it pushes the industry to do better.
The Healthy End Game
As the battle around climate change rages on, people are getting clued in to the idea that what happens to the environment has a direct impact on human health. McKeon noted that adverse weather events are causing more particulates in the air, which can affect those with conditions like asthma, for example—both indoors and out.
“Air impacts human health and people are starting to see it. The invisible is becoming visible. People are connecting the dots,” he said.
Hasaneen added that “the more the outdoor air is polluted, the more our outdated ventilation and filtration strategies won’t be as effective. We’re going to think about different strategies because our go-to strategies won’t be as effective,” she said.
In the end, Murthy said “the whole goal is to create spaces where [people] feel like they can live their best life. … The goal is to ensure that our workers are healthy, safe and vibrant, but ultimately, it’s about increasing employee engagement. Even as we ensure our ESG numbers are met, we want to ensure our buildings are people-centric,” she concluded.