Healthy Building Standards Go Far With Skeptical Tenants

Real Estate

There are a lot of certifications out there to show that a building is sustainable or healthy. 

Namely, these certifications show that buildings meet science-backed standards for health, like air quality, access to daylight or opportunities for employees’ mental relief and physical movement. And while tenants certainly paid attention to these certifications in pre-pandemic times, they are now viewed in a more urgent light, according to JLLwhich notes that companies now want proof that their buildings are healthy.

“The pandemic has been a game-changer in terms of attitudes towards building wellness, health and hygiene, and as a result we are likely to see certifications across national and international programs grow exponentially,” according to David Barnett, JLL research manager.

Several years ago it was enough for buildings to retrofit or design a building to health standards and then market the building as “healthy.” The growth of certifications in this area changed that, Rachel Gutter, president of the International WELL Building Institute, told GlobeSt in an earlier interview

“Green building and healthy building certifications are so critical because they provide validation that an organization has actually done what they said,” she said.

As the pandemic wears on, these certifications are  not only getting more popular but are multiplying as well, JLL notes.

In addition to the WELL Building Standard and Fitwel, new certifications have emerged in Singapore, Australia and India, according to JLL. The International WELL Building Institute also added a WELL Portfolio certification. 

For institutional real estate investors, with Environmental, Social and Governance (ESG) requirementsanother trend that is accelerating because of the pandemic these labels are extremely valuable. The healthy building movement picked up a massive win in 2019 when it was incorporated into the Global Real Estate Sustainability Benchmark (GRESB), which is the ESG benchmark for real assets. It validates scores and benchmarks ESG performance data, providing business intelligence and engagement tools to investors and managers.

“REITs are under a tremendous amount of pressure to prove they are shooting for that triple bottom line and that comes through ESG ratings and rankings,” Gutter told GlobeSt. “The most important one for real estate is GRESB.”

Another trend driving interest in these certifications is talent recruitment and retention. Namely, being in a building certified as healthy gives tenants an edge in the competition for top people.

“Companies in recent years have started paying more attention to promoting the health of their workers, in part due to a battle to attract top talent,” according to JLL. “Such efforts have come into sharper focus during the pandemic.”

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