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Summer, 2024: Green ROI

Wellness Amenities Can Lead to Healthier Rents

June 24, 2024
Commercial & Investment Real Estate, Multifamily Properties, Property Management, Rental Properties
Creative ideas to keep workers healthy and happy.
wellness amenities can lead to healthier rents, sneakers climbing stairs

© spukkato / iStock / Getty Images Plus

Property managers looking to enhance the offerings in their commercial spaces may find wellness amenities just the thing to attract commercial tenants and even help justify higher rents. Property managers “can attract top-tier talent by describing what the building does and what we have to offer,” says Deborah Webb, CPM, of Webb Property Services in Washington, D.C. “Features like that—plus the building’s alignment with sustainability goals—matter to the younger generation.”

To guide property managers creating or maintaining a healthful building, several organizations have set standards:

  • Fitwel: Developed by the Centers for Disease Control and Prevention and the U.S. General Services Administration, this certification system has been implemented in more than 23 million buildings. It’s based on thousands of studies on environmental health, facility management and design.
  • IREM Certified Sustainable Property: The program “recognizes excellence in property operations and performance based on aspects like energy, water, health, recycling and procurement.”
  • WELL Building Standard: The system takes a “holistic approach to health in the built environment, addressing behavior, operations and design.”

Wellness certifications touch on points from food to exercise to intellectual pursuits that appeal to tenants and employees. “With diabetes and heart problems in our society, we need to do something while people are at work to the extent possible,” Webb says.

Fitwel encourages activating buildings by adding amenities such as:

  • Having healthy food options delivered to your building
  • Encouraging people to take the stairs by using signage to let them know how many steps they’ve taken
  • Trading old water fountains for new ones that easily allow employees to fill up water bottles

In addition, landlords and employers can form partnerships and offer lectures on nutrition, bring in a nurse or physician for employee health screenings, or have personal trainers in the building, which might help to lower health insurance costs.

Adapted from “Welcome to Wellness,” published in the March/April 2024 issue of Journal of Property Management.

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CREATE Summer 2024 Issue: Green ROI

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Supply Is Big Story in Multifamily Rent Growth

View highlights from the Real Estate Forecast Summit: Commercial

Metros experience highs and lows based on region.

In metros with 1 million–plus residents, multifamily rent growth followed a clear geographic trend last year, according to Igor Popov, chief economist at Apartment List, speaking at the National Association of REALTORS®’ Real Estate Forecast Summit: Commercial Update on March 7. The metros where year-over-year rent growth was the slowest tended to be in the Sun Belt. “Austin, Texas, is leading the way, along with Atlanta, Jacksonville and Raleigh,” said Popov, with Portland and San Francisco also making the list.

Where Rents Are Falling or Growing

In places with the most quickly falling rent growth, there’s still job growth and a lot of renters moving in, so the demand is there, Popov said. The big story is supply. “Austin, Atlanta and Raleigh are building [multifamily housing] significantly more than other parts of the country,” he said. But the large number of multifamily units coming online is putting significant pressure on pricing. “Those markets are coming down from their peaks, as renters have a lot of options with new lease-ups coming on the market.”

At the other end are Midwestern metros, which top the leaderboard for the fastest-growing rents. Cities such as Grand Rapids, Mich.; Milwaukee; St. Louis; and Louisville, Ky., have been seeing strong rent growth compared to national numbers, Popov said.

Suburban-Urban Rent Growth Gap Widens

Within metros, a gap started during the pandemic, as property prices and rents dropped in core cities but remained stable in the suburbs—or even grew in the outer rings. That gap has not only continued but also widened over the past few years. A large millennial generation is aging into wanting more space and prioritizing suburban over urban amenities, according to Popov.

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