"I’m the canary in the coal mine,” says Barbara
Ciesla, senior vice president at JLL in Toronto.
For years, Ciesla has worked to promote sustainability
in commercial real estate, but whenever
she participated in discussions on energy
management or green building materials, she
always felt something was overlooked: the
impact on the building’s occupants. “I’ve had rheumatoid arthritis
since I was two years old, and it’s made me acutely aware of how
my environment affects my well-being,” she explains. Everything
from what she eats to changes in barometric pressure can trigger
inflammation and pain for Ciesla, which has helped her immediately
understand the benefits of the newest b
ig trend in commercial
real estate: occupant wellness.
Twenty years ago, commercial real estate was just beginning
down the road of environmental sustainability, and the idea of certifying
a building was a new concept. Now that LEED® is a household
name, benchmarking through ENERGY STAR® Portfolio Manager
has become commonplace and BOMA 360-designated properties
dot skylines around the world, industry leaders are beginning to go
one step further. The concept of sustainability is being expanded
to include an emphasis on how the built environment is affecting
the health, mental well-being and productivity of tenants. More and
more buildings are offering healthy food, fitness centers and other
amenities designed to boost employee morale, such as outdoor
seating areas.
In line with this trend, the WELL Building Standard®, the first
building standard focused exclusively on human health and wellness,
debuted in 2014. The standard covers 100 strategies for improving
occupant health in seven different categories: air, water, nourishment,
light, fitness, comfort and mind (see at left). Tenant spaces or
even whole buildings, depending on the certification type, must meet
strict operational and performance requirements, which govern
everything from what food can be served at meetings to the wallto-
window ratio to whether employees are given paid time off to
participate in volunteer activities. The International WELL Building Institute (IWBI), a subsidiary of the company Delos, administers
the standard. IWBI boasts a body of research backing up the health
benefits of these strategies designed to increase occupant comfort,
reduce workplace absenteeism and, perhaps, even boost employee
productivity. Some experts have even begun referring to it as
“LEED for People.”
In the less than two years since the WELL Building Standard
was first launched, it seems to be gaining traction in the industry.
CBRE’s corporate headquarters in Los Angeles was the first office
to become WELL CertifiedTM through the WELL pilot program,
and the commercial real estate giant recently committed to putting
at least 100 building sites or offices it manages or occupies
through the certification. A number of other companies—including
JLL and Kilroy Realty Corporation—also have begun dipping their
toes into the WELL water with certification projects of their own.
Particularly in competitive markets where LEED Platinum certification
hardly raises an eyebrow anymore, WELL certification may
be a powerful draw for prospective tenants looking to increase
employee recruitment and retention, among other benefits.
JLL’s Ciesla was one of the first people to take an exam to
become a WELL Accredited Professional, a credential so new that,
until recently, it was only provisionally awarded. She most recently
completed work in support of TD Bank Group’s pursuit of WELL
certification for a floor in its corporate headquarters in downtown
Toronto. “The commercial real estate industry has done amazing work towards greater efficiency
and minimizing environmental
impact, but at the
end of the day, our buildings
are built for human occupation,”
Ciesla says. “We, as an
industry, are opening our
eyes to how we also can affect
and support the health of the
people inside the buildings.”
GETTING WELL
When describing the WELL
Building Standard, many
people naturally draw comparisons
to LEED, including
Dave Pogue, global director of
Corporate Responsibility for
CBRE. “Eight years ago, CBRE
made a commitment to get 100
buildings LEED-EB certified
at a time when there were
fewer than 60 of those certifications
for existing buildings
in the world,” Pogue says. “We understood then that sustainability was where the market was
headed, and we firmly believe that’s happening with wellness now.”
And, it is clear that WELL benefits from the success of LEED in the
marketplace: IWBI estimates there is between a 15 and 25 percent
overlap between WELL and LEED, making it significantly easier for
buildings that are already LEED certified to pursue WELL. However,
Pogue does identify one major difference: “People weren’t calling
me to ask about LEED the way they’re calling me now to ask about
WELL. There is an enthusiasm and demand for wellness in the marketplace
that took years to build for sustainability.”
Like LEED, WELL is awarded at three levels: Silver, Gold and Platinum. The standard can be applied to three types of projects:
New and Existing Buildings, which requires that a single tenant
occupy at least 90 percent of the building; New and Existing Interiors,
which applies to any tenant space; and Core and Shell, which is
designed to help facilitate the first two types. This means that, while
property managers and building owners certainly will have a role to
play, tenants are likely to drive the process.
There are four main steps for obtaining WELL certification, and
the length of the process can depend on whether or not significant
changes need to be made to the space. Spaces are first “registered”
with IWBI, which begins the process; buildings and tenant spaces
can stay in the registration phase for up to five years. The next step
is to submit documentation, including design, lighting and mechanical
drawings; operations schedules; and policy documents, such as
employee handbooks. After that comes performance verification,
during which Delos consultants perform a variety of tests on the
water, air, noise levels, temperature and lighting. These tests are
exacting, demanding air quality, for example, far above the standard
required by ASHRAE. If the space passes these tests and everything
is deemed in order, certification is awarded for three years. After
three years, the tenant must go through the recertification process to
remain certified.
Unlike the other two certification types, the Core and Shell certification
looks at the fundamental aspects of the building, including
the building structure, water quality, window placement and HVAC
system. When incorporated into the design of a new building or a
significant retrofit—particularly if that building is already being built
or retrofitted to LEED or LEED-equivalent standards—accommodating
the tenant-driven certification may be relatively easy and inexpensive.
Decisions that may be a minor inconvenience during the
development stage (such as leaving space for optional carbon air filters
in the ventilation system) are likely to become more complicated
if a space is being specifically altered to the standard later. Even if
an owner is unsure about becoming WELL Core and Shell certified,
it still may be wise to incorporate design elements that will help to
facilitate the certification later on if a tenant requests it.
THE BENEFITS OF WELL
Though the primary burden for WELL certification does fall on
the tenant, the property management team may be called upon to
provide building documents and assist with the testing process. If
a space fails, say, a water quality test—which may be indicative of a
building-wide problem—then the property management team likely
will need to work with the tenant to determine the issue and find a
solution. Nonetheless, those on the CBRE headquarters project team
say that IWBI has made the process as painless as possible for those
involved, which is why they also feel comfortable recommending
the WELL certification to their clients. “One of the first questions we
asked was, ‘How much work will this be for our team? For our property
manager?’” explains San Francisco-based Emily Neff, project
manager for CBRE’s Workplace360 program, an internal initiative
for improving CBRE workplaces being rolled out across CBRE’s
portfolio. “When undertaking the WELL process for our headquarters
in Los Angeles, we found that IWBI has been very focused on
not creating extra work for those who operate the space.” Delos consultants offered advice
during the development
process, managed the testing
themselves and gave
specific feedback on what
changes to make.
This was part of the
reason CBRE decided to
pursue the WELL certification
during the design
and development phase of
the firm’s new corporate
headquarters. The eccentricities
of the downtown
office building that CBRE
chose, which included a
significant glare problem
due to the angle of
the building and a large
atrium that couldn’t be
used as office space, had
left it vacant for 20 years.
However, the variety of
spaces and an emphasis
on natural light made the
space a good choice for
CBRE. Like many of its
tenants, CBRE was transitioning
to a type of open
office layout—all areas are shared, but employees have access to a
variety of workstations depending on their needs, including private,
collaborative and social spaces. This type of layout tends to be a good
fit for WELL, as it may be easier to control air quality and provide
access to sunlight in one open space rather than many small offices.
CBRE already had been focusing on employee well-being—primarily
through its Workplace360 program—and several employees
who worked out of the Los Angeles location were vocal supporters
of healthier initiatives, which helped to drive the project. A concern
over how closely shared spaces would impact employee health led,
in part, to the decision to incorporate WELL midway through the
design and development process. Consultants specializing in WELL
became involved, examining the design plans and making suggested
changes. “If we’d started with WELL from the very beginning, it
would have been simpler,” admits Lenny Beaudoin, senior managing
director for Workplace Strategies at CBRE. “We weren’t planning to
make some of the infrastructure changes that were required to meet
the air quality standards, for example. We certainly don’t regret making
those changes, but it’s always easier if you can factor everything
into your budget and schedule from the start.”
Each of the seven categories of the WELL standard have helped
transform the CBRE office. The air is enhanced with a special filtration
system and the carbon dioxide levels are carefully monitored
throughout the day. Filtered water is available within a few
steps of each workstation to help employees stay hydrated. Only
healthy snacks are provided (though employees are free to bring in whatever food they like), and CBRE offers nutrition education advising
employees how to make healthier choices. The office features a
“circadian lighting system” designed to mimic natural sunlight levels
throughout the day. Treadmill desks and stretching areas are available
to employees who want to improve their fitness. Acoustic dampening
keeps sound at a comfortable level. More than 1,000 plants
placed around the office help boost air quality, while also providing a
pleasant boost to the mental well-being of the employees.
The project team has been surprised by which elements have
proven most popular with the staff. “People loved the easy access to
filtered water. That came up again and again in the post-occupancy
surveys we conducted,” Beaudoin says. Not everything proved an
immediate success; the treadmill desks, for example, are not widely
used. Nonetheless, the new office design has allowed employees
to incorporate more activity into their day in a relatively painless
way. “We’ve found that most people have really enjoyed having the
opportunity to use the stairs between floors as a way of adding in
some additional steps into their daily routine,” he says. The office
also is designed to encourage workers to walk to get what they need.
For example, while water is in plentiful supply throughout the office,
there’s only one place to get “a really good cup of coffee.” This can
turn coffee breaks into a chance for employees to clear their heads
and say hello to their co-workers.
After working within the
new space for a year, more
than 90 percent of CBRE
employees say that the new
space has had a positive effect
on their health and well-being,
their ability to collaborate
with others and their business
performance. More than
80 percent reported feeling
more productive. Anecdotally,
employees have reported feeling
less tired at work during
the darker winter months and
being inspired by the changes
in the workplace to make positive
changes in their own lives.
“You can argue over
whether any one of these individual
changes is absolutely
necessary, but the overall
effect is hard to deny,” says
Neff. “If you tell people that
you’re investing in their health
and you give them a beautiful
space to work, it makes a real
difference.”
And, people are ultimately
what the standard is about.
Paul Scialla, founder and CEO
of Delos and founder of IWBI,
explains, “With a growing body of research demonstrating the environments where we live and
work can have a direct impact on our well-being, from our sleep/
wake cycles and mood to productivity and performance, it is becoming
increasingly important to place people at the heart of design and
construction, operations and development decisions.” Exactly what it
means to put people first and what power these spaces have is what
IWBI is working to uncover for the industry.
CBRE’s Beaudoin points to another reason why WELL may be the
future of the industry: convincing people to come to work. As telecommuting
becomes more common and increased densification can
make offices a more challenging place to work, designing an appealing
workplace can make a big difference to a company. “If a work
location isn’t helping someone live a more productive and balanced
life, then employees are not going to want to spend time there,” he
says. “What we’re hearing is that our employees prefer to get work
done at our Workplace360 offices, because it’s more efficient and
they feel good while they’re here. They feel like we’re providing a
service—not forcing them to come into the office every day.”
THE BUSINESS CASE FOR WELLNESS
If there is a drawback to comparing WELL to LEED, it’s in discussions
on the return on investment (ROI). With LEED, commercial
building owners often were guaranteed energy and water savings,
which were easy to track and report. WELL has a much harder case
to make: that designing an office for wellness will make the employees
of tenant companies happier, healthier and more productive—
which can indirectly benefit the building owner.
IWBI has been working very hard to prove the business case for
wellness, providing scientific findings and even partnering with the
Mayo Clinic to create a Living Lab to test out its strategies. Many
companies are relying on employee surveys to measure outcomes.
Nonetheless, there are significant challenges, JLL’s Barbara Ciesla
explains. “There’s no ‘true’ way to measure productivity, and even if
the workplace is having a positive effect, there are so many other
factors that might disrupt that,” Ciesla says. “You can have a perfect building, but if you also have a terrible boss, then employee morale is
still going to be bad.”
Even so, there is real incentive to try. Ciesla cites a JLL concept
called the “3-30-300” rule. An average company typically spends a
ratio of about $3 per square foot per year for utilities, $30 for rent
and $300 for payroll. Any small reduction in payroll costs has the
potential to make a much bigger difference to a tenant than a reduction
in utilities costs—especially now that commonplace sustainability
practices already have lowered these costs considerably.
IWBI founder Scialla echoes this sentiment. “Physical workplace
is one of the top three factors affecting performance and job satisfaction.
Personnel costs significantly outweigh the costs for design and
construction and maintenance and operations,” he says. “Addressing
occupant health channels resources towards reducing the largest
line item in the 30-year costs of a building—personnel—offers a
meaningful return on investment.”
Tenants may indeed reap significant returns in terms of fewer
sick days and happier employees, but for building owners, the benefits
are less obvious, especially with the concept of wellness in commercial
real estate still in its infancy. Early adopters have pointed
to the enthusiastic interest from tenants as an indicator of market
value, particularly in more competitive metro areas. The promises of
a building where they easily can pursue the WELL certification may
lure big tenants, happy to pay a premium for these spaces. And, once
they’ve become accustomed to optimal conditions, they may be less
likely to relocate.
Sara Neff, senior vice president of Sustainability for Kilroy Realty
Corporation, has been working on WELL projects in both the commercial
and residential sectors. She says those in the industry interested
in wellness can learn a lot from the evolution of environmental
programs in commercial real estate, from ad hoc to formal. “For a
long time, real estate owners were doing ‘random acts of sustainability’
that didn’t have a formal structure or focus, and I think many
owners are in that phase with wellness now.”
The WELL certification may provide the necessary framework
to move the industry forward on wellness. Rather than focusing on
specific guarantees of ROI, Kilroy’s Neff says, a better way to frame
the conversation may be to focus on how creating a wellness-focused
space removes some potential barriers to the productivity and wellbeing
of tenants. “I can’t promise that all your employees are going to
be healthy and productive, but in a WELL-certified building, it won’t
be the air quality that’s causing problems,” she says. In other words,
an emphasis on wellness can set tenants up for success—and building
owners and managers can be partners in that success.
One such partnership exists between the American Society of
Interior Designers (ASID) and Carr Properties. Currently, ASID is
going through the WELL certification process for its future headquarters,
which will be located on the ninth floor of a downtown
Washington, D.C., office building owned and managed by Carr Properties.
In fact, the new ASID headquarters is expected to be the first
WELL-certified space in the District of Columbia. ASID decided to
relocate its headquarters to Carr Properties’ Columbia Center when
searching for a new office space because it was well-suited for the
certification: The building is less than 10 years old and already boasts
LEED Silver status, so it did not require any major retrofits.
It also helped that the team at Carr Properties was well-equipped
to handle the requirements. “Being sustainable is already built
into our company’s philosophy, and, to us, wellness is an extension
of that,” explains Rich Greninger, vice chair of Operations at Carr
Properties. “The WELL certification process did come with a few
new space requirements that we hadn’t seen before, but these criteria
didn’t dramatically change our leasing process, and we were
happy to help contribute to the success of ASID’s project.” In the
end, the majority of the requirements affected only the tenant space,
and most of the cost was covered by the tenant build-out allowance.
For their part, the Carr Properties team did make a few changes
elsewhere in the building to assist with ASID’s certification process,
including modifications to the water filtration system and adding
a walk-off system to Columbia Center’s entryway to keep harmful
particulates from entering the building.
Other commercial real estate companies may want to consider
how pursuing this certification may help strengthen the relationship
between a tenant and the building owner and management team.
“We’re at a point in the industry where owners and managers have
done a lot to make their buildings sustainable, but tenant behavior is
a big component that we don’t have much control over,” Greninger
says. “If we can get our tenants
thinking about how the building
works and how we can
optimize it, that’s in everyone’s
best interest.”
Likewise, ASID’s CEO Randy
Fiser says that tenants rely on
the property team for critical
information and support
during the WELL certification
process. “When we were
looking for space for our new
headquarters, we made it very
clear that the certification was
a priority, because we knew
we’d need the support of the
building owner and management
team,” he says. This is
because building staff needed
to provide access to certain
parts of the property so that
tests could be run, for example.
“We need more information
and access than most
tenants,” Fiser adds. “Having
a strong line of communication
with our property management
team is absolutely
essential.”
BE WELL-VERSED
Property professionals certainly
should take the time to
familiarize themselves with the latest wellness research, and also get a sense for how the WELL
Building Standard’s requirements would work within their properties.
The standard’s documentation and requirements are available
on IWBI’s website—and what’s included can be surprising. Not
every space is likely to be a good candidate for the certification. For
example, CBRE will not be certifying a second corporate location
in Los Angeles—certain aspects of the space made the certification
infeasible—but the company still plans to apply as many wellness
best practices as it can in that building.
In fact, the strict requirements and the prohibitive costs of the
standard (which may be significantly more than what it costs to pursue
LEED) may prevent it from reaching larger market penetration
in the near future. In most cases, the building owner is responsible
for the cost to become Core and Shell certified, while tenants primarily
bear the cost of certifying the interior space. Strong tenant
demand will certainly tip the scales towards broader adoption, but
JLL’s Ciesla fears that both tenants and owners may balk at the cost.
“I worry that what we’re going to see is a lot of early adoption for
those who want to be first, but then adoption will taper off if the
costs don’t align with the marketplace,” she says. “But wellness is
such an important objective, so I hope it can balance out.” Luckily,
the standard is still developing, and, by all accounts, IWBI has been
highly responsive to the feedback of early adopters.
For those property professionals who want to stay ahead of the
market by including more wellness initiatives into their space, but
who are not able to pursue WELL, there are many low- and no-cost
ways to do so. Kilroy’s Sara Neff recommends making a list of what
you’re already doing when it comes to wellness in your building—
providing a gym or offering bike storage, for example—and then
picking more initiatives to try from the WELL Building Standard.
Other small changes to implement might include opening up the
stairwell to allow occupants to walk to their floors rather than taking
the elevator; offering free flu shots in your building; hosting
tenant appreciation events with a health focus; adding healthier
food options to your building café, vending machines or catered
events; keeping a bike repair kit at the main desk; or adding more
drinking water stations.
Office workers are becoming increasingly health conscious, and
tenants are likely to demand more and more amenities around wellness.
Property managers also may want to consider testing a building’s
water and air quality, correcting any issues and sharing the news with
tenants. In fact, more than one wellness expert suggested that air and
water quality disclosure may, indeed, be something the industry will be
facing in the years to come. Regardless, staying ahead of the curve now
can help keep a building competitive in the future.
“Wellness in commercial properties has come a long way in just
two years, and I personally am very excited to see what this new
chapter in the industry is going to look like,” adds Neff. “I think the
built environment is going to be very different—and much healthier—
two years from now.”
For more information about the WELL Building Standard, visit the
International WELL Building Institute website at www.wellcertified.com
and the WELL Building Standard section on the Delos website at
www.delos.com/about/well-building-standard/.
ABOUT THE AUTHOR: Liz Wolf is a Twin Cities-based freelance writer with 30-plus years of business and commercial real estate reporting experience. She previously served as editor of the Minnesota Real Estate Journal.