While the physical, mental and emotional benefits of a healthy space have long been documented, little research has delved into the financial value these spaces bring to real-estate. However, a recent study conducted by MIT attempts to draw a better image of the value healthy real-estate properties hold when compared to other contenders in the same market.
Determining the Financial Value of a Health Certification
The team used the definition of a healthy building as outlined by the World Health Organization (WHO) to first determine the types of spaces they would be considering. By these guidelines, a healthy building is one that “supports the physical, psychological and social health and wellbeing” of employees and tenants. They also used prominent certifications and registrations (such as Fitwel and WELL) to better identify these types of projects.
Using this method, the team pulled together a collection of 407 projects spanning 2,322 rental contracts they could then compare against adjacent properties operating in the same market. Only the value of rental contracts was used, and not the value of the buildings themselves.
Following their analysis, the team found that the transactional value of rental contracts for healthy spaces ranged anywhere from 4.4 to 7% higher than their peers in the same market. This premium was determined to be independent of all other factors including LEED certification, building age, renovation, lease duration and submarket.
Healthy Buildings as Positive Assets
While healthy buildings were gaining traction prior to the pandemic, the events of 2020 certainly served as a catalyst. When compared to the growth of green building certification around the same time, healthy building adoption doubled that rate. In last year alone, WELL tripled the number of spaces enrolled in its certification program.
For building owners and facility managers, these findings showcase the value that prospective tenants place in a building that supports employee or tenant wellbeing and productivity, to the point where they’re willing to pay a premium for it. The researchers also state that these findings point towards the formation of a ‘new normal,’ where wellness features in a building become key factors when discussing lease.