Health and Safety Pave the Way for Office Rebound

By Brian Rogal
From Bisnow:

Bringing employees back to the office can seem fraught with uncertainty. New Covid-19 variants have been sweeping the U.S. for months, and landlords are looking for any advantage to convince tenants it’s safe to come back. But many property managers have decided simply making promises that buildings are safe won’t be enough to get office employees to leave the comforts of home and return.

“We thought there was going to be the need for third-party certification,” Hiffman National Senior Vice President Carrie Szarzynski said.

In 2020, the company, the property management platform of NAI Hiffman, decided to secure the International WELL Building Institute’s WELL Health-Safety Rating for their buildings. The rating is awarded to buildings that help curtail the spread of diseases such as Covid-19 by adopting a set of cleaning procedures, providing proper ventilation and high-quality water, and other safety features. It has grown in popularity, especially after a massive public relations campaign — with Lady Gaga — launched in 2021.

The certification has been adopted by thousands of property owners in many sectors of commercial real estate, including office, industrial, retail and healthcare. For Szarzynski, the rating’s spread wasn’t a surprise.

“We learned it was very cost-effective, and it was something our team could do without hiring a consultant,” she said.

The company secured the WELL Health-Safety Rating for 15 office buildings under its management, totaling more than 3.5M SF of office space, including the Bannockburn Corporate Center in north suburban Bannockburn, the Naperville Woods Office Center in west suburban Naperville, and others located across the Chicago suburbs, Cincinnati and Indiana.

What made landlords receptive was that, in most cases, they could secure the rating without making major alterations to their buildings. Most had to spend less than $5K, including the application fee, according to Szarzynski.

“That’s a pretty minimal impact to the building, so it’s tough to say ‘no,’” she said.

Getting a seal of approval from the WELL Building Institute, a New York City-based corporation that even before the pandemic was encouraging property owners to provide natural light, good air quality, nutrition and fitness to building occupants, could become the norm even after the crisis ends, Szarzynski said, much like Energy Star or LEED. People are far more aware of how all infectious diseases spread, including colds and the flu, and have made it clear they want offices where it’s less likely they will get sick upon returning.

“There has definitely been a shift in employers’ mindsets,” she said. “I’m not sure if the WELL Rating is going to be around for 20 years, but I do think it’s going to be prevalent and looked for in the near future.”

The WELL Institute also issues a certification for overall building wellness, but its leaders realized at the pandemic’s outset that another, specialized standard was needed to promote environments that inhibit the spread of infectious diseases.

“Organizations around the world realized that it has never been more important to make healthy spaces accessible and equitable to all people everywhere,” International WELL Building Institute Chief Commercial Officer Jessica Cooper said. “They were looking for solutions, for evidence-based road maps to guide the enhancements they knew they needed to make within their buildings.”

After consulting the World Health Organization, the Centers for Disease Control and Prevention and other health experts, the institute unveiled the new rating in July 2020.

It listed 23 benchmarks, covering cleaning and sanitization procedures, air and water quality management, and many other criteria, including whether managers are making sure tenants understand all the safety procedures. Buildings have to meet 15 of the benchmarks to receive the rating, which needs to be renewed each year so the institute can make any adjustments if new variants or diseases appear.

The new rating was immediately popular. New York’s Yankee Stadium was the first building awarded the WELL Health-Safety Rating, and within six months, another 600M SF of buildings followed suit.

And the rating’s adoption is about to accelerate thanks to some star power.

In January 2021, the institute unveiled its “Look for the Seal” campaign, which featured ads starring Lady Gaga, Jennifer Lopez, Venus Williams and former U.S. Surgeon General Richard Carmona, among other celebrities. It provided a big boost, according to property managers, and expanded awareness beyond the C-suite to millions of employees, who began asking their companies if their buildings would qualify.

“Lady Gaga always helps,” Parkside Realty Director of Leasing Katie Scott said. She leases Parkside’s new 12-story Fulton East office development at 215 North Peoria St. in Fulton Market, which got its health and safety seal at the end of December.

Prior to last summer, Szarzynski said her firm was always explaining the new health standard to its clients. But after that, clients who had seen Gaga and the others would approach her and ask whether an office building had or was planning on securing the WELL Institute’s new rating.

“It was exciting to be able to say, ‘yes,’” she said.

According to the WELL Institute, by the end of 2021, buildings in all sectors with a total of about 2B SF had received the rating. The momentum has continued into the new year. In January, Enlivant, a Chicago-based senior living provider, said its entire portfolio of 215 senior living communities earned the rating. This week, Chicago-based JLL Income Property Trust said it has earned the WELL Health-Safety Rating for 20 properties within its portfolio.

Other Chicago-based commercial real estate firms, including Sterling Bay and Brookfield Properties, have also secured the rating for portions of their portfolios.

“Before Covid-19, we already implemented many of the building standards including in WELL Health-Safety Rating —daily cleanings and sanitizations, regular building systems checks, emergency preparedness trainings and so on,” Sterling Bay Life Sciences Director Suzet McKinney said. “But achieving this certification enabled us to better communicate these efforts to our tenants, educating them on the wellness features implemented within their workplace environment.

“That’s a very important piece of the puzzle,” she added. “You have to be able to effectively tell your tenants about the enhanced measures you are taking to protect their health, especially in today’s post-pandemic environment.”

Sterling Bay will pursue WELL Health-Safety Rating at all of its future life sciences developments, according to McKinney, including ALLY at Lincoln Yards, which is currently under construction at 1229 West Concord Place.

Other buildings touting advanced health, safety and wellness features are also looking for the WELL Institute’s stamp of approval. Parkside Realty’s 90K SF Fulton East was designed in 2019, and features floor-to-ceiling windows, letting natural light flood the entire space, according to Scott. Each floor also includes an outdoor balcony, so fresh air and space to social distance are available, all attributes considered important by the WELL Institute.

In addition, the developers included a hands-free system that allows users to summon elevators by pressing buttons with their feet. Other added safety features include UV lights in the building’s ductworks, and wall-mounted cold-plasma devices, both of which can kill airborne pathogens.

“We knew we already exceeded the [WELL Health-Safety Rating] standards in our asset and can easily incorporate the management and engineering procedures needed to maintain the rating, so we decided it was a very good thing to do,” Scott said.

“I have noted on leasing tours with some prospective tenants that we are both LEED-certified and have achieved the WELL Health-Safety Rating, and they are impressed,” she added. “It’s great to be embraced by what is now a widespread movement.”

But even though many buildings have the necessary infrastructure to achieve the WELL rating, even Class-B offices, that doesn’t make actually getting the rating easy, Szarzynski said.

The WELL application is extensive, and property managers need to write a lot to prove their case, she added. That can include explaining how the air filtration systems match the rating’s requirements, how employees can access the outdoors and what surface cleaning procedures are in place. Management teams also have to make sure buildings’ have proper signage that encourages handwashing and other safe behaviors.

“It was probably 10 weeks’ worth of work for all of our teams,” she said. “But in my opinion, it’s well worth it.”

The Chicago region did see a big drop in the number of workers coming into their office due to the omicron variant. According to Kastle Systems, a security company that tracks card swipes around the U.S., Chicagoland’s office occupancy sank to 27.1% by the end of January, a big drop from the 35.2% it hit just after Thanksgiving.

But the spread of WELL’s rating has helped calm fears about infectious diseases in the workplace, Szarzynski said. With the variant rapidly subsiding, she’s certain that in 2022, companies will instead be more concerned about properly designing hybrid work strategies that entice employees to return for at least a few days a week.

“There is definitely more confidence,” she said. “I no longer hear people are not coming back to the office due to safety concerns.”

Read the article online at Bisnow.