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Indoor Air Quality and how it affects CRE decisions

The COVID-19 pandemic forced most office-based businesses to shift to a remote work model. Even as the pandemic subsided, some businesses opted to, and continue to opt to, have their employees work from home. That means it is more important than ever for commercial real estate owners to ensure their buildings are as presentable as possible for the tenants who do want to return the office environment. On top of the standard amenities that tenants currently demand such as reliable wireless connectivity, CRE owners have to do whatever it takes to give businesses and their workers peace of mind when it comes to building safety. Touch-free entry, constant cleaning of common areas and providing ample space to maintain distancing guidelines are standard in this post-COVID world.

Air quality is the other factor CRE owners must consider when trying to attract or retain clients. This was important even before the pandemic hit, but now even more so. Building owners were forced to look at how well air was circulating through their property and even consider upgrading or replacing their heating ventilation and air conditioning (HVAC) systems.

The question for many might be what does “good” air quality look like? How does one attain “good” indoor air quality? Keep reading to see the measures CRE owners can and do take to ensure their tenants top-notch indoor air quality.

What is indoor air quality?

Indoor Air Quality refers to the air quality within and around buildings and structures, especially as it relates to the health and comfort of building occupants, according to the U.S. Environmental Protection Agency (EPA). When CRE owners understand and control common indoor pollutants, it helps reduce tenants’ risk of indoor health concerns.

Indoor pollution sources that release gases or particles into the air are the main cause of indoor air quality issues. Poor ventilation can also increase indoor pollutant levels when enough outdoor air is brought into dilute emissions from indoor sources, and by not carrying indoor air pollutants out of a given area. High temperature and humidity levels can also increase concentrations of some pollutants. The EPA lists central heating and cooling systems as well as humidification devices as one of many potential indoor pollutant sources.

“If too little outdoor air enters indoors, pollutants can accumulate to levels that can pose health and comfort problems,” the EPA notes. “Unless buildings are built with special mechanical means of ventilation, those designed and constructed to minimize the amount of outdoor air that can ‘leak’ in and out may have higher indoor pollutant levels.”

Why is indoor air quality important?

Indoor air quality impacts everyone within a building, the building manager, businesses, tenants, employees and visitors. Most Americans spend 90% of their time indoors and most of their working hours are in an office, according to the EPA. Given that so many people spend that much time inside, it’s imperative that the air they’re breathing in and out is healthy. Unfortunately, that’s not always the case as studies have shown that indoor environments can have higher pollutant levels than are found outside. Such pollutants can increase risk of illness, and while most buildings don’t experience severe indoor air quality issues, they aren’t immune to the occasional episode of poor air quality.

How do CRE owners address Indoor Air Quality?

A recent survey revealed that the COVID-19 pandemic led to CRE building management and operations changes to ensure occupants’ health and wellness became a top priority, according to the Urban Land Institute. RE Tech Advisors conducted the survey on UBI’s behalf in April 2021, and it comprised responses from about 300 real estate professionals. The survey categorized the findings in terms of building, human and financial impact.

“The coronavirus created some dramatic shifts in real estate operations, and together with the country’s racial reckoning, a new era has been ushered in with profound implications for the future of the industry,” Deborah Cloutier, president and founder of RE Tech Advisors said.

Some of the key findings from the survey included:

• Building managers and operators pivoted quickly to respond to the pandemic
• Advanced filtration, mask wearing, temperature checks, and other measures were prevalent, as were enhanced communication strategies.
• Survey respondents forecast that many health-oriented building changes are here to stay.
• Flexibility was prevalent in navigating the financial impacts of the pandemic, with 80 percent of respondents implementing rent concessions and other measures.
About 24% of the survey respondents implemented equipment and operational measures, and an additional 10% had done so prior to the pandemic, according to UBI. The most common changes were increased outdoor air and installation of highly efficient Minimum Efficiency Reporting Value-13 (MERV-13) air filters. MERV is the primary rating system used for air filtration. Natural ventilation and increased air flow were also among the list of common equipment measures taken.

CRE owners put attention on Indoor Air Quality

Now that scientific evidence has shown COVID-19 can be transmitted by poor air circulation, it should motivate more people in the CRE industry to improve their building’s air ventilation and filtration, according to Joseph Allen, associate professor at Harvard University’s T.H. Chan School of Public Health.

“COVID is an indoor virus; all the cases have occurred in under-ventilated locations,” he said. “Knowing that it is spread primarily through airborne transmission will lead to a fundamental shift in how we design and construct buildings.” he said.

Allen also acknowledged that the ULI survey responses indicated that there was more of an emphasis on deep cleaning than improving air quality—something that needs to be adjusted if CRE office buildings are going to continue to give tenants peace of mind.

“Shared air is the problem, not shared surfaces,” Allen said. “The reality is we are breathing others’ air all the time because of poor ventilation. Our building design standards for air quality are not performance-based standards that are designed for health—they are minimum standards. So, we have buildings that meet minimum standards at most, and then a pandemic hit that involves an airborne respiratory virus—that is the recipe for the disaster that we have had.”

Even after the U.S. moves past COVID-19, there are other respiratory viruses that CRE owners and tenants need to be wary of. High air quality standards must remain in place post-pandemic. Tenants are becoming more informed about indoor air quality and are using their own devices to monitor carbon dioxide levels throughout their office buildings, according to Allen.

“People are reporting on air quality in buildings and holding building managers, owners, and operators accountable,” he said. “This represents a paradigm shift, in that this information is no longer privately held by a building owner or tenant or air quality consultant. If (building owners and managers) are not constantly measuring this, you need to start now.”

Why does Indoor Air Quality matter to CRE owners?

The time has come for CRE owners to be proactive about having outstanding indoor air quality. Gone are days of waiting for tenants to complain about it. Poor air quality can have somewhat of a domino effect on the CRE owner’s bottom line. For example, bad air quality can impact employees’ work performance. If that performance is bad enough, or causes the employee to call in sick, it could cost the company. If that happens, too often, that tenant will likely find a new building to operate out of—one with good air quality that leads to peak employee performance.

“Proactive measures that result in a superior quality of indoor air aren’t just a way to avoid complaints anymore; they’re a way of attracting new and better tenants,” building analytics software company Aquicore said in its Indoor Air Quality: The Property Manager’s Guide blog post. “Think, ‘museum-quality indoor air.’”

Additionally, Indoor Air Quality matters to CRE owners because it matters to everyone else. Tenants want to feel good while they are working and the air they breathe plays a key role in that. Meanwhile, their employers want their workers to be healthy two on two counts—the employees’ overall well-being and for the business’ productivity levels.

“Employers would face an unwinnable scenario trying to convince employees that they care about employee well-being if they cannot provide any measure of assurance regarding IAQ in their buildings,” Internet of Things device provider Senseware wrote on its company blog. “While benefits such as worker productivity will certainly accrue, the basic motivation that is driving employers to act is the wellness of their employees.”

Even if CRE owners were hesitant to improve their buildings’ air quality, they’re likely not to have much of a choice as regulations continue to ramp up. New Jersey’s Indoor Air Quality Standard already governs current buildings that public employees occupy during standard working hours, according to Senseware. The state’s compliance program requires an employer to designate someone to assure compliance to actions, including “(w)hen the carbon dioxide level exceeds 1,000 parts per million (ppm), the employer shall check to make sure the HVAC system is operating as it should.”

Meanwhile, California’s Division of Occupational Safety and Health Policy and Procedural Manual include policies that mandate carbon dioxide concentration be measured, “in areas of the indoor air environment, as appropriate, if such areas have been identified through occupant-employee interviews as ‘stuffy,’ ‘close,’ or ‘stifling.’”

It’s only natural that more regulations pertaining to Indoor Air Quality will follow.

Proptech will make monitoring Indoor Air Quality easier

The CRE industry has been one of last to fully embrace technology, but it be a much easier sell when it is to ensure tenant safety. Cost is often the main cause for CRE owners to be hesitant to make big changes to their building, but Indoor Air Quality measuring property technology, or proptech, isn’t overly expensive, according to Senseware.

“For less than the price of a health-club membership, an IoT-based wireless IAQ node can deliver real-time IAQ measurements that assure occupants of levels of carbon dioxide, PM, VOCs, Formaldehyde, Ozone, Carbon Monoxide, and more,” the company said. “Ignorance is a thing of the past. IAQ monitoring will provide objective data to ensure that HVAC systems within the built environment provide healthy conditions for building occupants.

“(Indoor Air Quality) cannot be ignored. The basic drivers behind its rise are obvious to any individual that cares about their personal well-being. These underlying factors will continue to push IAQ into the forefront of the consciousness of all decision makers in the real estate market.”

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