Organisation: Harrison Street
Signatory kind: Investment supervisor
HQ nation: United States of America
COVERED IN THIS CASE STUDY
Asset class: Real property
Harrison Street’s mission is to be on the vanguard of wholesome senior-living communities. This displays our unique deal with various actual belongings, together with senior housing. Indeed, well being and wellness, a part of the “S” in ESG, have at all times been important components of our technique.
In 2019, the agency started finding out how a constructing impacts residents’ wellbeing. The idea was to leverage design and operations to boost bodily and psychological well being. The workforce started by looking for wholesome constructing performance-based requirements, resulting in the invention of a certification known as Fitwel™. By partnering with the Center for Active Design (CfAD), the licensed operator of Fitwel™, we created a senior housing scorecard.
Since then, Harrison Street has dedicated to pursue certification in any respect relevant properties and can use the scorecard to trace effectiveness of well being and wellness initiatives. This won’t solely guarantee wholesome environments for residents, however could improve valuations, as demonstrated in MIT’s study on office buildings. The scorecard isn’t unique to Harrison Street – it’s a commercially obtainable product your entire senior-living business can now utilise.
Why this method?
Harrison Street’s ESG technique and response to local weather change is multifaceted. The agency is trying to cut back its influence on the local weather with a 70% carbon emissions discount objective by 2025. It lessens influence by conducting bodily and transition danger assessments and executing mitigation plans. But local weather change doesn’t merely influence bodily buildings; it additionally impacts bodily beings. A net-zero, climate-resilient constructing is barely an empty shell if it fails to think about the wants of occupants. In addition, the Covid-19 pandemic raised the stakes in senior housing, making it extra necessary than ever to advertise the well being and wellness of residents. Harrison Street has invested about US$13 billion in over 312 senior housing communities since 2005.
The agency determined to undertake the Fitwel method for 3 causes:
- To present particular person belongings with a strong differentiator they might market to residents and workers.
- To guarantee properties inside the Harrison Street portfolio meet a set customary for well being and wellness.
- To decide how buildings which are designed and function in line with Fitwel requirements reveal higher well being, productiveness, and an general sense of wellbeing – and would possibly carry out higher financially.
On the final level, the agency is connecting with MIT, whose earlier work found office buildings certified as healthy in 10 large US cities commanded 4.4% to 7% higher rents per square foot than their nearest non-certified peer properties.
Details of the method
Most merchandise developed for the true property sector, together with wholesome constructing certifications, are initially designed for conventional belongings, equivalent to places of work. A typical scorecard, for instance, would award factors for selling the usage of stairs quite than the elevator. In a senior dwelling setting, the place many individuals have problem strolling or are in wheelchairs, travelling through stairs usually isn’t an possibility. The agency needed to discover a companion to create a scorecard for the senior-living business. Fortunately, a robust companion was present in CfAD, which is dedicated to wholesome buildings for all.
Fitwel was created by the Centers for Disease Control and Prevention (CDC) and the General Services Administration. To develop new scorecards, CfAD used an algorithm that drew on 5,600 peer-reviewed research. This helped it create weighted methods for attaining wholesome buildings. When it got here to a scorecard particularly for senior housing, this method wasn’t sufficient, and collaboration was wanted with Harrison Street and our operators to raised perceive the business. We attended workshops and ran pilots over many months to develop a scorecard that didn’t compromise the unique.
One of Harrison Street’s working companions, The Springs Living, was a collaborator within the improvement of the senior housing scorecard. The Springs at Greer Gardens grew to become the primary Fitwel licensed venture utilizing the brand new scorecard. The venture serves wants in unbiased dwelling, assisted dwelling, and reminiscence care.
The property earned 106 factors (out of a potential 144), attaining a two out of three stars score. The neighborhood’s chosen scorecard methods met sure features of Fitwel’s Health Impact Categories, together with:
- Impacts Community Health
- Reduces Morbidity + [staff] Absenteeism
- Promotes Social Equity
- Provides Healthy Food Options
- Promotes Occupant Safety
- Increases Physical Activity
- Instils Feelings of Wellbeing
Some of the profitable Fitwel Strategies utilized on the neighborhood embody:
|Site entry||Shared amenity areas and design|
– Universally accessible web site
– Bike parking and situated close to bike lanes for worker commuting
– Safe road infrastructure for pedestrians
– Street furnishings and facilities at shuttle stops, pavements, and streetscapes
– Efficient parking practices
– Full-service eating
– Fitness centre
– Common exercise rooms
– Accessible frequent restrooms
– Indoor strolling path
– Best practices in hall design, lighting design, and wayfinding
|Outdoor areas||Employee areas|
– Therapeutic backyard
– Fruit and vegetable backyard
– Outdoor health space
– Walking path
– On-site outside areas are designed to cut back the warmth island impact
– Access to interrupt rooms, quiet rooms, and lactation rooms
– Access to showers and lockers
|Healthy meals||Health programming and operational insurance policies|
– Access to groceries
– Enhanced entry to recent produce
– Shared instructional supplies selling the well being advantages of wholesome meals and beverage choice
– Healthy meals and beverage choice practices applied at ready meals areas
– Support providers
– Health promotion programming
– Paid Sick Leave and Family Support insurance policies for workers
– Enhanced cleansing and hygiene insurance policies
– Visitor coverage
– Emergency preparedness measures
The certification is being promoted to potential residents and their households and can be integrated into satisfaction surveys. It may even be a part of the info set for the anticipated MIT’s Real Estate Research Lab research.
The initiative first carried out a spot evaluation utilizing the unique scorecard at two of the agency’s properties in New York. From these pilots, ongoing analysis, and operator enter, the product was up to date all through 2020, and have become commercially obtainable in 2021. In February 2022, a Harrison Street neighborhood in Oregon was the primary to certify underneath the brand new customary. To date, one other 110 communities have Fitwel initiatives.
The senior housing scorecard has now been utilized to Harrison Street’s wider portfolio, with the objective of certifying 80% of relevant belongings inside the first yr of possession.
Simply attaining certification isn’t adequate. Fitwel is a more recent programme and is much less nicely established than requirements equivalent to LEED. Another problem is educating the viewers on the facility of a CDC-designed, performance-based customary. Research has proven that buildings which are designed and function to wholesome requirements correlate to raised sleep, greater productiveness, much less sickness, and a larger sense of wellbeing. Thus, advertising and marketing this certification by way of press releases, web sites, flyers, plaques, and to leasing brokers has been important.
Following these efforts, we put in place metrics to measure the influence. Are potential tenants extra interested in a constructing with such a distinction? Does it improve occupancy and workers retention? How does it influence constructing valuation? What is the impact on the neighborhood? These are all questions Harrison Street is exploring alongside analysis companions.
In addition to senior housing, Harrison Street is pursuing Fitwel certification throughout its broader portfolio, together with scholar, medical, life sciences and build-to-rent properties, amounting to 550 in whole.
The agency is worked up about their accomplishments up to now and hopes its method in direction of positively impacting the wellbeing of residents by way of certifications and subsequent analysis will help in enhancing the broader business.