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Workspaces That Promote Health, Wellness Can Save Companies Millions

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High-performance buildings can increase a tenant’s profits by millions during the course of a standard 10-year lease, according to stok’s “The Financial Case for High Performance Buildings” report, released Tuesday. This savings comes from increased retention, productivity and reduced absenteeism.

Workspaces That Promote Health, Wellness Can Save Companies Millions
stok partner Warren Neilson

Companies have realized that retaining and attracting top talent means making sure workplaces incorporate the environmentally friendly values of the next generation of workers and have elements that increase productivity and wellness based on the latest scientific research, stok partner Warren Neilson said.

High-performance buildings are those that are designed to improve the occupant experience and improve health and wellness. They also improve resource efficiency, minimize environmental impacts from design to demolition, increase resiliency and provide a higher financial return than traditional buildings, according to the report. These buildings often have design elements that address thermal comfort, ventilation, air quality, views and biophilia, which incorporates natural elements into design.

Health and wellness has become a $1 trillion construction industry, but the benefits have been difficult to measure and document. The new report takes into account over 60 research studies and develops ways to financially measure the impacts these buildings have on tenants and owner-occupants.

“The most practical use of the findings in this research is that tenants, designers and developers now all have the financial fundamentals to make design decisions that clearly promote human health and environmental responsibility over short-term financial gains,” Neilson said.

Breaking Down The Cost Savings

Workspaces That Promote Health, Wellness Can Save Companies Millions

Organizations inside high-performance buildings average an annual profit increase of $3,395/employee or $18.56/SF, providing tenants additional value that they can expect when leasing or designing space in these buildings, Neilson said.

This equates to about $2.8M in annual profit, according to the report. During a 10-year lease, this equals a savings of $115/SF. These calculations factor in financial benefits from increased employee productivity and retention and decreased absenteeism. Add in utility and maintenance, and the savings increases to $129/SF, according to the report. These calculations assume a cost premium of $20/SF for construction and retrofits. 

Many employers have found that investing in high-performance design is more cost-effective and better long term for an employee’s health instead of spending $700 per employee annually on health and wellness programs that often have low participation and aren’t effective, the report said.

Workspaces That Promote Health, Wellness Can Save Companies Millions
The total savings for companies occupying high-performance buildings, according to a stok report

Several companies have been including sustainability in their mission statements. Salesforce has been keenly focused not just on creating more healthy work environments, but also making sure the buildings they occupy are among the most sustainable.

San Francisco’s Salesforce Tower, which was built by Boston Properties and Hines, is among the most sustainable buildings in the country and includes the Bay Area’s first blackwater recycling system and an underfloor air distribution system.

Salesforce also designed workspaces to have plenty of private rooms for people to work in quiet spaces, workspaces next to windows to improve access to natural light and meditation rooms are on every floor.

Landlords also are taking leadership roles in creating more high-performance buildings, Neilson said. Companies such as Kilroy Realty, Prologis and Boston Properties are actively targeting hefty sustainability goals by implementing sustainable business practices and constructing environmentally friendly buildings.  

“Today we have major REITs setting goals to become carbon neutral by 2020, the world’s most valuable company [Apple] is running its facilities on 100% renewable energy and some of the world’s tallest buildings are incorporating biophilia and air quality controls at a level never seen before,” Neilson said.

Workspaces That Promote Health, Wellness Can Save Companies Millions
Companies in high-performance buildings can save $129/SF, according to a stok report.

Designers, too, are rethinking how and in what ways they can improve health and wellness in workplace designs and are armed with new tools to help in their design processes.

“Each generation of designers has a greater responsibility than the last to create buildings and spaces that embody human health, environmental sustainability and social equity,” Neilson said.

Designers will take into account various elements of data such as information from Internet of Things sensors sprinkled across the built environment and use cognitive science developed at research facilities around the world that informs how environments impact human performance, he said.

“We have far passed the era of not having enough information to conclusively determine the impacts our built environments have on people and the climate,” Neilson said. “To that, data will define the look and feel of next-gen offices.”