One Take #14 - Healthy Buildings Command Higher Rents, But Location Matters More

Air Quality Matters

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What's the true financial value of a healthier workplace? This episode of Air Quality Matters dives into research from the University of Cambridge that quantifies exactly how much companies are willing to pay for healthier office environments.
The research reveals a significant "health premium" of 4-6% for buildings certified under health-focused standards like WELL and Fitwell. This represents a tangible financial incentive for property owners to invest in features that enhance indoor air quality, lighting, comfort, and other elements that benefit human health beyond just energy efficiency.
But here's where it gets fascinating: when comparing indoor health factors to outdoor characteristics, neighbourhood walkability emerged as an even stronger driver of rental prices than building certifications. Companies clearly value locations where employees can easily walk to amenities or use public transit. Meanwhile, the counterintuitive finding that higher outdoor air pollution sometimes correlates with higher rents reveals how economic density in city centres often outweighs environmental concerns.
The holistic message is clear: the market increasingly values healthy environments both inside and outside buildings, even when these factors aren't explicitly advertised. For developers and building owners, this means considering the entire health ecosystem, not just isolated features. You simply can't build a healthy building in an unhealthy location and expect to maximise its value.
Whether you're in commercial real estate, workplace design, or just interested in the economics of health and sustainability, this episode offers valuable insights into how the market is beginning to quantify the long-understood but previously unpriced value of healthier spaces for workers.
Indoor and outdoor health factors in the pricing of commercial real estate:
A hedonic analysis of U.S. office buildings

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Chapters

1. Introduction to Healthy Buildings Study (00:00:00)

2. Hedonic Analysis and Data Collection (00:01:48)

3. Health Premium Results Revealed (00:04:05)

4. Walkability vs Air Quality Findings (00:05:14)

5. Location Trumps Building Health (00:07:00)

6. Conclusions and Implications (00:08:08)