The fifth of our six trends driving sustainability in commercial real estate is the occupant experience – how people live, work, play, and interact with our commercial buildings. In today’s commercial real estate marketplace, it is essential to blend high-tech amenities, sustainability, and data-driven intelligence features into a property to provide an entirely new experience for the employees, visitors, and community.
Toward that goal, researchers are working to identify the effect that buildings have on occupants. For instance, a recent CBRE Global Occupier Survey, which assessed thousands of occupants in CBRE buildings, found that indoor environmental quality is the second most important workplace feature according to employees. Moreover, a recent study found that improving indoor environmental quality could be financially beneficial for employers, too. The Harvard University study, “The Impact of Green Buildings on Cognitive Function,” found that by doubling the ventilation rate, occupant cognitive function improved dramatically when compared to a “standard building built to code.” Doubling the ventilation rate cost $40 per person per year, but results in nearly $6,500 in improved productivity per person annually, with minimal additional environmental impact.
Since worker health and productivity are primary components of a commercial building’s occupant experience, many industry organizations and universities are striving to learn more about improving the connection between health and productivity. For example, the think-tank at UC Berkeley Healthy Workplaces developed the HealthyWorkplaces model. The HealthyWorkplaces model seeks to redefine the role of health and well-being in the workplace through the application of interdisciplinary sciences. Following the model can help improve hiring practices and contain healthcare expenditures. Following the model can create advantages for recruitment, improve hiring practices, and help contain healthcare expenditures.
While occupant comfort is important, heating and cooling costs can be a big part of a budget in running a commercial building. Toward that end, companies are creating automation software that will help companies learn occupant demands and preferences, creating ways for buildings to save energy and gather occupant data. The GSA Green Proving Ground, which focuses on innovation in environmental performance, recently announced $12 million in funding, with backers such as CBRE and MS Ventures, proving that new technologies are in high demand by the industry.
Together, these efforts around the occupant experience have generated greater industry interest in Health and well-being building certifications. For example, many commercial building owners are looking to the WELL building standard, which is a rating system that measures, certifies, and monitors the performance of building features that impact health and well-being. FitWel, a competitor to the WELL certification, assesses buildings against a set of design and policy guidelines on health and productivity.
New programs are also being created to engage and recognize building tenants for sustainability efforts. The Environmental Protection Agency’s ENERGY STAR® program is working on a recognition program for the design and construction of energy efficient tenant spaces. In addition, the Urban Land Institute recently launched the Tenant Energy Optimization Program, which allows tenants to evaluate good, better, and best packages of energy-efficiency options for design and construction projects. The Institute of Market Transformation and U.S. DOE recently developed the Green Lease Leaders Program, which looks at aligning leasing clauses for energy efficiency and sustainability.
The race to improve and enhance how we engage with and experience our buildings has just begun. Design trends to incorporate daylight, quality of lighting, acoustics, ventilation, and thermal comfort into typical building designs are ramping up. New building amenities are being introduced, including indoor dog parks, bike valet parking, personal shoppers, etc. Three examples that demonstrate the industry’s increased focus on occupant experience include the Edge building, Wework, and The BLOC. The Edge building, Deloitte’s headquarters in Amsterdam, is cited by many as the most connected office building in the world. Wework, a shared office startup with top-of-the line amenities – has raised nearly $1 billion in venture capital valued at nearly $17 billion. The BLOC, a 2-million square foot, mixed-use development of the Ratkovich Company, occupies an entire city block in Los Angeles and focuses on the occupant “experience.”
Worker health and productivity are emerging as strategic priorities among corporate real estate leaders. That said, the industry continues to make innovations on space design and construction to improve the tenant experience. It’s also focusing on cutting energy and operating costs for building owners. As real estate investment managers, we remain dedicated to understanding these trends. Moreover, we are applying our own research and market insights to anticipate how the occupant experience is changing to deliver optimal real estate and investment outcomes.
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