It may not be the first thing you think about when it comes to improving asset values, but improving air quality can be a great way to optimize returns from a commercial real estate investment.
Indoor air quality (IAQ) has been identified by the Environmental Protection Agency (EPA) as one of the top five “most urgent environmental risks to public health”. Poor air quality can create health risks such as irritation of the eyes, nose, and throat; dizziness or headaches; rashes; breathing difficulty and even chronic asthma. Of course, allowing building tenants to be exposed to hazardous indoor air creates risk of liability and significant lawsuits. This puts great emphasis on building owners, managers, and employers to take a proactive approach to improving air quality. Considering that the average American spends up to 90% of their time indoors, OSHA acknowledges that “indoor air quality is a major concern to businesses, schools, building managers, tenants, and workers because it can impact the health, comfort, well-being, and productivity of the building occupants.”
Additionally, tenants are increasingly demanding healthier living and working spaces: there is greater awareness of the impact of air quality on health and livability, evidenced by the growing demand for tools that track IAQ. For example, San Francisco-based Bitfinder recently introduced a popular platform that monitors and reports on how humidity, dust particles and temperature affect health. The company hopes it will set the stage for an IAQ health standard for buildings, much like LEED certification for energy efficiency.
“Museum-quality” indoor air can be a significant value-add for residential as well as commercial assets like office complexes, hotels and indoor malls. How do you most cost-effectively achieve it?
How Indoor Air Quality is Impacted
IAQ issues are commonly the result of improper design or insufficient preventive maintenance service. Building design and construction flaws, such as unsound roofs, foundations, or windows, can allow pollutants or moisture to enter a building. Improperly designed ventilation systems can draw in outside emissions, or circulate pollutants from one tenant throughout the buildings. Inadequate maintenance of building systems, such as Mechanical, Electrical and Plumbing (MEP) systems, can exacerbate the issue. If these systems are not functioning as needed to support the building and its use, negative pressure or insufficient ventilation may result, and allow infiltration of pollutants. Building materials can also be a source of indoor air pollution, particularly when hazardous materials are disturbed during renovations or wet/damp surfaces are not properly identified and addressed.
OSHA has published an Indoor Air Quality in Commercial and Institutional Buildings guide, as well as recommended Safety and Health Program Management Guidelines that outline best practices for ensuring good/healthy indoor environments. Although there is no national mandate for IAQ standards, several States uphold laws that regulate the assessment, management and mitigation of pollutants like mold and radon that impact/affect indoor air quality (for example, see the Environmental Law Institute’s database of State Indoor Air Quality Laws here). As a building owner or manager you may be required to proactively address the quality of your property’s indoor environment to protect or enhance the health, safety and well-being of your occupants.
Regardless, properties that contain mold, radon or other harmful pollutants can be the subject of indoor air quality litigation, and these issues should be mitigated before buying, selling or during ownership of an asset.
Improving Indoor Air Quality
The good news is that addressing the pollutants or conditions that lead to poor IAQ is often relatively simple and can be done cost-effectively. The best approach to controlling airborne pollutants and ensure adequate ventilation is multi-faceted, and should include sampling, routine systems maintenance, occupant buy-in and training, hazard identification and control, and program audits. The U.S. Green Building Council (USGBC) has demonstrated that IAQ issues can be readily and practically addressed when buildings are retrofitted.
The American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) publishes a number of documents regarding IAQ and indoor environmental quality (IEQ), including Standard 62.1 – Ventilation for Acceptable Indoor Air Quality and Standard 55 – Thermal Environmental Conditions for Human Occupancy. ASHREA also publishes the very useful “Indoor Air Quality Guide”, which covers many IAQ issues and how to remediate them in depth.
Air quality issues caused by suboptimal air flow, humidity or temperatures may be remediated by re-commissioning (RCx), retrofitting or upgrading a building’s HVAC system. Routine preventative maintenance should be performed to ensure that building systems and components continue to operate at optimally, and also allows for early detection of problems. It is particularly important for buildings with sensitive occupants – such as schools or hospitals – to regularly assess ventilation systems, and clean or replace them as needed. Remember that building systems may need to be modified, augmented or replaced following a change in occupancy or use. Of course, routine maintenance of building systems is also a good way to keep operating costs to a minimum.
ASHREA’s guide also discusses the importance of maintaining proper building pressurization, which is required in order to limit moisture and contaminant transfer across the building envelope. Building pressurization is the differential static pressure between a building’s interior and the exterior environment. Maintaining a positive building pressure (i.e. the interior pressure is greater than exterior pressure) is important in: air-conditioned buildings in hot and humid climates; in buildings such as ice-rinks or refrigerated warehouses; and in buildings where poor ambient outdoor air quality would cause problems for occupants due to infiltration. Proper design, maintenance and operation can eliminate or minimize these issues and provide high quality IAQ.
Industrial hygiene issues, such as the presence of asbestos containing materials, mold or radon, should be managed at the source. A consultant can perform air sampling to identify the contaminant, and determine if it may be contained or advise on best remedial solutions. As mentioned, extra care should be taken during renovations or building exercises that may disturb any hazardous materials.
Being Proactive Pays
Services like IAQ audits, mechanical design and review, and energy audits can help save a building owner/operator both time and money – particularly if any issues with the air quality or HVAC system are identified early on. For example, when Partner was recently engaged to perform a proactive audit of a public building in New Jersey we found several issues of concern: light mold growth inside the HVAC due to a malfunctioned humidity control, improperly sized air filters causing a “drag” on the system, as well as potentially friable asbestos in the vicinity of one of the air intakes. Catching this early meant that we were able to prevent these from developing into far more serious (and expensive!) problems, such as the mold spreading throughout the HVAC system, the asbestos becoming entrained in the system and disseminated into the space, or the HVAC system becoming overworked and breaking down. As a result of the $4,000 audit, the client saved around $45,000 in remediation and repair costs. And that doesn’t include any potential litigation that could result from exposure to the mold or asbestos!
When looking to optimize ROI, investing in improving an asset’s indoor air quality not only reduces risk of litigation, but delivers direct returns by improving tenant satisfaction and marketability of the asset.