Wellness is Quickly Becoming the Newest (and Healthiest Trend) in Real Estate
It takes technology, innovation, and experimentation to transform a residential community into one that’s a haven for health and wellbeing. As wellness is increasingly integrated into the core DNA of the real estate industry, we are seeing proof that these investments are paying off. A 2017 study by the Global Wellness Institute (GWI) revealed that wellness in real estate is a $134 billion industry and growing annually by 6.4%. Katherine Johnston, a senior research fellow for GWI, believes these numbers will continue to grow as people’s health and behavior is positively impacted by their homes and community spaces.
Katherine’s background as an economist and working with the Stanford Research Institute International helped develop what is now the Global Wellness Summit—an annual event that brings together visionaries from the wellness industry to shape the future of the movement. Their work as an organization has evolved past the focus of restorative amenities, like spas and personal trainers, into what Katherine calls the wellness economy. In order to improve our living spaces, there must be a way to define and measure the health benefits of a wellness building. Robb Report discusses the direction of the movement and why our longevity is directly impacted by the built environment.
What should someone look for when moving into a new wellness residence?
An intentionally designed infrastructure considers the area surrounding the building including the neighborhood, the streets, common areas, and the home or residence itself. On the outside, you would look for things that encourage healthy behavior like walking and socializing with your neighbors because that’s an important part of wellness, too. The 2017 GWI report concluded that up to 89.3% of people’s health outcomes are influenced by the environments that we live in, including physical and social factors. It is clear that access to greenspace and outdoor amenities, like recreation and exercise, are crucial to your health.
On the interior of a building, you should look for materials and design features that provide a healthier space and that overlap with environmentalism, for example, keeping in mind the quality of paint finishes and flooring. Beyond the brick and mortar you should look for amenities like programing services (yoga, fitness, nutrition planning) in the development or community that provides a venue for people to engage in healthy behavior.
What certifications and set of standards are out there to rank the wellness of an environment?
One of the most well-known set of standards is the Well Building Standard, developed by the company Delos. Since their inception in 2014, they have been leading the way for developers to determine how healthy their constructions are. It is a complex standard and in order to achieve certification it takes a fairly large investment, which is why we are seeing Well certified buildings primarily in urban landscapes where luxury properties and commercial buildings are plenty.
Another wellness certification that is newer to the market is called Fit Wel, developed by the Center for Active Design in NYC. Fit Wel may be considered a bit simpler than Delos’s and they have expanded their focus to improving affordable housing and multifamily homes in particular.
We have seen wellness in real estate really take off in the luxury space with resorts and residences in destination locations. Can you tell us about a few of these?
On the luxury side of the industry, there are many things happening with resorts and spas—many of which are second or third homes for these owners. The wellness experts at Canyon Ranch started their first residential spaces in the 1980s in Tucson and recently opened one in Lenox, Massachusetts. That location is focused on holistic health and establishing wellness packages to promote wellbeing and longevity for its residents.
Another property that is slated for development in the next few years is Amrit Ocean Resort & Residences, developed by Dilip Barot. The design is very intentional and stems from the yogic philosophy of mindfulness. This residence will serve as a peaceful haven for residents with a focus on meditation, fitness, and nutrition.
Based on your research, would you say this movement is consumer or developer driven?
If you go back to when it started just a few decades ago, it was probably more driven by a very small subset of people who wanted to develop something that was better than what they saw out there, we call their work passion projects. Those people who were really on to something and they most certainly tapped into the growing interest around the concept. If you look at the rapid ramp up in the last seven years, there is definitely a consumer demand. I don’t know that people even know enough about what they need in their living spaces to articulate it to the developers and builders, but when wellness properties begin to sell, then people start paying attention.
We measured sales premiums—sometimes they’re five to ten percent but it can reach up to 20-25% in some places—that have been around for a while and these places are commanding premiums because they are wellness focused and offer a set of features that residents can’t get in many other places.
Where do you see the trajectory of the trend going?
I think it’s definitely going to be on an upward trajectory. We don’t see it subsiding unless the economy dips again causing building to slow down. When looking at urban high rises and/or suburban master plan developments, I think we’re going to see these wellness concepts, amenities and services become standard offerings. Right now, it’s already picking up really fast in the markets that are building a lot, for example in Texas, California, Florida, and Arizona. It’s a competitive market so the places that are going to sell are differentiated because of their wellness offerings.
The healthier the options, the more consumers are going to start requiring them when they buy or invest in a property. I would expect some of the wellness elements will become a new standard and although some of these offerings are experimental, the new approaches and innovative strategies will move this industry forward.
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