With health and social equity becoming an increasing focus in the real estate industry, four prominent developers speaking at the ULI Fall Meeting in Washington, D.C.,highlighted ways in which they are prioritizing these issues in their corporate strategies, portfolios,and projects.
Executives from Vornado Realty Trust, Local Initiatives Support Corporation (LISC), Lendlease Americas, and Jonathan Rose Companies spotlighted concrete ways to shift real estate practices to encompass a focus on healthy people and inclusive communities. The industry overall is increasingly seeking to advance the integration of health, wellness, and social equity across portfolios and is finding compelling economic and social reasons for doing so, the developers said.
“The United States was founded as a land of opportunity, and a poor distribution of opportunities and services based on zip code is a poor allocation of justice,” said Dawn Mottram, director of strategic initiatives at Jonathan Rose Companies. “We are mission based. Everything we do is driven by our mission, and our mission is to address these issues.”
From a commercial real estate perspective, Vornado views its premier Chicago property theMART as a showcase and case study for incorporating public wellness concerns into its real estate development goals, said Daniel Egan, vice president of sustainability and utilities at the company. The property has received a Fitwel 2-star rating, recognizing the ways it supports the physical, mental, and social health of tenants. Fitwel is a building rating system providing guidelines on designing and operating healthier buildings.
Vornado views theMART as serving not just its tenants, but the broader Chicago community, Egan noted. Opening up the historic grand staircase at the property created a popular gathering space that enhances the community, he said. The Grand Stair can hold more than 100 people and serves as an event space for the community. The Art on theMart events, among the largest digital art projections in the world, add to the vitality of the area and enhance the cultural hub, he said.
“When we think about social equity, we are focused on our tenants, our employees, and the larger community,” Egan said. There is a link for companies between trying to attract and retain talented employees and having a highly desirable location, he said. Commercial tenants can highlight the Grand Stair as a hub where employees can get in their 600 steps. “We developed a live/work/play approach where tenants can help their employees focus on their mental and emotional health,” he said.
The company plans to take the same approach when it redevelops Penn Plaza in New York City. “We are aware that Penn Station is a place you like to get through as quickly as possible,” Egan said. “We are charged with transforming a neighborhood and fostering that live/work/play mentality. We want to serve not just the tenants but the surrounding communities.”
For residential development, Mottram said Jonathan Rose seeks to develop properties that deliver social, cultural, and wellness enhancements to the people who live there. Beyond including features in properties such as health suites for seniors or community spaces that accommodate gathering, the company puts a strong focus on public safety features.
“We hear over and over that without safety in the community, nothing else really matters,” she said. Features like community garden planting or movie nights where youth can engage with local police officers strengthen the property and the community, she said. Similarly, mobile food banks enhance food security opportunities for residents.
For Lendlease, the Barangaroo Skills Exchange in Sydney, Australia, is a key example of incorporating social equity into its practice, serving as a pop-up college for construction workers so they can learn new skills, said Eleni Reed, head of sustainability for the Americas at Lendlease. The company’s FutureSteps fund is a philanthropic initiative to help address homelessness in Australia. In the United States, Reed said Lendlease has created a Barrier Reduction Fund which provides grants for qualified applicants to mitigate certain costs associated with entering the construction industry.
LISC seeks to develop underserved communities around the country by integrating social justice, equity, and inclusion into its projects, said George Ashton, managing director of strategic investments at the Community Development Financial Institution (CDFI). One hurdle that investors in this mission sometimes encounter, he said: “These projects sometimes take longer, and we all know time is money. It is hard sometimes for financial people to think about the tradeoffs that come with these kinds of projects.”
More broadly, ULI is working on an ongoing assessment that takes stock of how the real estate industry thinks about and takes action on health and social equity. The study will be available in early spring, said Reed.
Ultimately, it is crucial that developers move past challenges in incorporating these concerns into their projects, Egan said. A key challenge, he said, can be dealing with the complexity of physical space—where do you find the space to address health and wellness concerns? Features like nursing rooms for mothers and defibrillators installed in public spaces enhance the viability of properties for tenants.
“It is so important to look at the impact of providing these spaces,” he said. “It leads to lower turnover, more satisfied tenants. Results can be quantified.”
“These kinds of decisions can be supported by data,” Ashton concurred.
