The focus on healthy buildings has become a core strategy for real estate investors seeking measurable financial returns, not just regulatory compliance. Focusing on occupant health and wellness delivers measurable value beyond industry trends and ESG labels.
Joanna Frank, founding president and CEO of the Center for Active Design, has seen this shift over her 15-year career. Her organization operates the Fitwel healthy building certification, working with major asset managers, REITs, and commercial real estate firms such as CBRE, JLL, and Cushman & Wakefield.
“Our clients are the largest asset managers in the world — institutional investors and REITs,” Frank says. “What they are looking to achieve is optimizing ROI and NOI by prioritizing the needs of their occupants.”
Residential Demand Surges Post-COVID
The pandemic fundamentally changed demand for healthy building certifications. While offices were once the primary focus, residential properties now make up the fastest-growing sector for Fitwel. Before COVID-19, residential demand for health certifications was minimal. Today, it is a central concern for developers and tenants alike.
Student housing leads this surge, driven by a generation attuned to how their environment affects mental health and social connection. “There is strong demand for student housing optimized for health, especially mental health,” Frank says. “Students today are aware of the impact their built environment has on their mental health and ability to connect socially.”
This focus on health extends across multifamily and senior living properties and is gaining ground in hospitality. The shift reflects growing consumer awareness of how the built environment shapes daily life and well-being.
Health Certifications Boost Financial Returns
The business case for healthy buildings is backed by academic research, not just industry advocacy. In 2025, Cambridge University published research showing that health-certified buildings command a 4.4% to 4.8% rent premium. These findings align with earlier MIT research. Both studies used large sample sizes and were conducted independently of certification organizations.
“These are academic studies we are not involved with,” Frank says. “This is independent research.”
Both studies controlled for building age, location, and class, confirming that the rent premium is tied to health features rather than other variables. This consistency strengthens the argument that healthy building strategies directly improve financial performance.
Institutional investors are taking note. Harrison Street, a major investor in student and senior housing with approximately 500 assets, now requires Fitwel certification as part of its lending criteria. “They have determined there is a strong correlation between Fitwel strategies and financial performance,” Frank says. “This is now part of their core business.”
Existing Assets Take Priority
Rising interest rates, higher labor costs, and supply chain disruptions have shifted real estate investment away from new construction and toward repositioning existing assets. Developers who once prioritized ground-up projects are now focused on upgrading and certifying the buildings they already own.
“We have seen the predominance of existing buildings — repositioning and purchasing existing assets,” Frank says. “Those who would have been building new construction in years past, that is just not penciling out in the U.S. right now.”
This trend aligns with Fitwel’s approach. Roughly 80 to 90 percent of the built environment is already in place. The certification draws from more than 7,000 peer-reviewed studies linking building features to health outcomes, making it applicable to new developments and, increasingly, to older properties.
Health Strategies Replace ESG Labels
ESG branding has lost traction in the U.S. real estate market, but the underlying strategies continue to advance. Owners and investors are pursuing health and wellness initiatives based on rising consumer demand and clear financial incentives, not regulatory compliance or marketing.
“The term ESG is not being used at this point, but there is strong consumer demand for health outcomes and for focusing on human capital. The strategies are still being pursued,” Frank says.
The emphasis has shifted to practical risk management. As climate change affects real estate portfolios, owners are recognizing the links among environmental factors, occupant health, and long-term asset value. Health strategies are now viewed as tools for reducing risk and enhancing resilience, not as regulatory boxes to check.
Air Quality Remains Underadopted
Despite strong tenant demand for better indoor air quality, this remains one of the least adopted Fitwel strategies. Building owners hesitate to install air quality sensors or commit to monitoring, fearing liability if poor conditions are detected.
“Building owners are concerned that if they have sensors and they know the indoor air quality is poor, how are they going to address what is causing it,” Frank says.
Sources of indoor air problems are often tenant-related, such as off-gassing from furniture or personal care products, which complicates management. Still, tenant expectations are driving the industry to develop new solutions in this area.
Occupants Drive Asset Performance
A major change in real estate thinking is the recognition that occupants are central to asset performance. Traditionally, the industry focused on physical and financial metrics, often overlooking the people who use the space.
“We were not considering the people,” Frank says. “We were considering asset performance and the physical performance of the building, but we were not considering the human element.”
Research shows that tenants can sense higher-quality environments even without knowing specific health strategies are in place. When health-focused measures are implemented, tenant satisfaction and Net Promoter Scores rise, regardless of whether occupants are aware of the changes.
Valuation Frameworks and AI Potential
One of the biggest challenges is integrating healthy building features into standard property valuations. Many attributes that drive rent premiums and tenant retention are not reflected in appraisal methods, making it easy for owners to overlook them during investment decisions.
“Healthy building attributes are not captured in valuation frameworks,” Frank says. “If we are not including these attributes in how we value assets, they will be ignored or overlooked.”
Artificial intelligence offers potential to address this gap. As AI is adopted across the real estate sector, it could enable more precise measurement of how health strategies affect financial outcomes, making it easier to justify investment in these features.
Global Markets Lead Adoption
While U.S. adoption faces headwinds from economic and political uncertainty, international markets, especially in Asia-Pacific, are driving growth in healthy building strategies. Investors in these regions are increasingly requiring health and wellness certifications as part of their core criteria.
“It is interesting to see how global leadership and investment strategies shift. The momentum is moving forward,” Frank says.
For real estate professionals, the message is clear: healthy buildings are no longer a trend or a marketing tool. They are a measurable factor in asset performance. As consumer awareness grows and the financial benefits become harder to ignore, prioritizing occupant health is becoming a business necessity.
Health as a Standard, Not an Option
The industry has moved from questioning whether buildings affect health to quantifying that impact in financial terms. Academic research links health certifications to rent premiums and improved tenant satisfaction. Institutional investors are now embedding these metrics into lending and investment decisions.
The challenge ahead is ensuring that property valuation and underwriting frameworks recognize health-focused strategies, especially as AI and data analytics make these impacts more visible. Owners who adapt now are likely to see stronger returns and lower risk as consumer expectations continue to rise.
Healthy buildings are becoming standard practice in real estate. The market is rewarding those who invest in occupant well-being and penalizing those who do not. As evidence and demand grow, ignoring occupant health is a risk that owners and investors can no longer afford.
