By Dan Diehl
The commercial real estate industry endured a year unlike any other in 2020. The COVID-19 pandemic left offices empty for months on end, prompting unprecedented scrutiny of filtration, controls, and each building’s ventilation effectiveness. Employees suddenly feared airborne transmission and questioned the safety of air quality and in-person work.
If you are a building owner, you’re hearing new concerns from your tenants. They’re worried about keeping their employees safe, healthy and productive — and they want assurances that their office environment is not endangering their workers. In particular, your tenants are expressing pointed concerns about their buildings’ systems for ensuring indoor air quality (IAQ): What can we know about the air quality being delivered to our space? What IAQ safety strategies are being deployed by our building operator?
These questions are just the beginning — and they range beyond COVID-19. The world has truly awakened to the importance of air quality, and its impact on building occupants. Of course, this air quality awareness was already happening — the recent COGfx Study showed the impact of green buildings on cognitive function, for example, while the International WELL Building Institute’s WELL Certification has emerged as the leading system for examining how the built environment impacts human health. Atop this existing momentum, COVID created a tidal wave of support for healthy buildings, and specifically for the IAQ concept.
Healthy Buildings Are Here To Stay
Despite the new imperative around IAQ, many in the commercial real estate space remain undecided on whether (and how) to proceed. This is understandable — up to a point. After all, who can say what the world will look like on January 1, 2021? You’re probably questioning the ROI from any spending you apply to IAQ improvements. Whether for COVID-related re-occupancy or longer-term IAQ goals, it’s hard to justify this investment, right?
Wrong. Why? Because of one reality: healthy buildings are here to stay.
Employees WILL return to the office; that much is a certainty. For one thing, most large enterprise organizations prefer their employees to work in-office. Likewise, most employees long for a return to normalcy — and that means going to work, not combatting more Zoom fatigue.
COVID-19 is not the sole reason you should want to provide healthy buildings. Instead, this public health crisis serves a prime example for why you implement and maintain healthy buildings over time. One of the longer-term effects of this heightened awareness will be requiring building owners and operators to maintain and communicate healthy building parameters. This could even emerge as a standard lease requirement. As a building owner, this means you must implement holistic management solutions and know you are delivering healthy air to all tenants. The key is measuring, controlling, and communicating IAQ analytics based on multiple parameters and, in real time, directing more air when and where needed.
How Do You Fund It?
If you’re getting nervous about the investment needed to install these systems, there is some good news. Last March, the U.S. Congress passed the 2020 Coronavirus Aid, Relief, and Economic Security Act (the “CARES” Act), a direct response to the COVID-19 pandemic. Among other provisions, this federal stimulus package delivers tax benefits for facility improvements.
Under the 2020 CARES Act, non-residential property owners may be able to write off up to 100% of qualifying facility improvements costs. The tax savings is realized through a bonus depreciation for certain qualified improvements made to the interior portion of a commercial building. These improvements include the following:
- Heating and air conditioning equipment upgrades and replacements;
- Interior mechanical and electrical system installations and/or upgrades;
- Other non-structural interior upgrades and replacements including both equipment and installation costs.
Air Quality as a Service (AQaaS) is another solution increasingly offered and sought after by the marketplace. It allows companies significantly lower upfront expenditures, making it easier — and faster — to deploy in existing buildings. In many cases, AQaaS solutions deliver sufficient HVAC efficiency gains that help adopting companies cover all or much of the cost of their IAQ improvement investments.
Not Just “Check-the-Box”
When employees do return to the office, building owners must demonstrate a healthy environment. This means being able to demonstrate to occupants that the solutions chosen for the building are in fact making improvements. Building owners can’t just choose a technology that claims to kill COVID or improve air quality, check the box, and walk away.
The IAQ solution should continuously measure air quality parameters: CO2, particles, TVOCs, and dewpoint to ensure effectiveness. Ideally, IAQ analytics should be part of the platform, particularly to communicate IAQ first to operators so they can make necessary corrections. After all, you can’t manage and control what you do not accurately measure. Today’s smart, healthy buildings are data driven — baseline levels and continuous analytics showing where you are and what strategies might need tweaking.
This is an accountability question. How healthy is your building? The answer to that question will determine your success in responding to this opportunity.
Based on what we experienced in the past year, it’s clear that you have three new realities: healthy buildings are here to stay, the technology exists to accurately measure and manage air quality and, perhaps most importantly, now is the time to act.
Diehl is CEO of Aircuity and has over 25 years of industry expertise across a wide variety of vertical markets and disciplines in commercial and light industrial building markets. Prior to Aircuity he led business development at Lutron Electronics, was a partner for six years with Synergy, and spent 11 years at Johnson Controls, Inc. Diehl earned a BS degree in Mechanical Engineering from the University of Maryland and has an MBA from Villanova University.