Resource Library

The efficiency premium accelerates in real estate

AEEA is pleased to add this article from Retrofit Vendor JLL to our Resource Library.

Key highlights
Rising energy costs, tightening regulations and aging building systems are converging to reframe
efficiency as a critical operating cost and resilience play for real estate. JLL’s latest research reveals that
the most efficient buildings now cost 43–75% less to run annually than the least efficient—a saving of
US$1.58 to $5.13 per square foot.

Electricity costs are outpacing inflation and widening the efficiency premium: Electricity prices
have surged far beyond general inflation across major markets, particularly since 2020, becoming 11%
to 91% more expensive in real terms.
Policy is targeting buildings as energy infrastructure, expanding requirements beyond climate
mandates: Governments are implementing building performance standards increasingly driven by
energy security and grid-investment-avoidance, as well as GHG targets. For corporates, that same
pressure shows up as a growing focus on demand management alongside decarbonization.
C-suites recognize the urgency, but CRE readiness lags: Energy efficiency to mitigate rising costs
and grid constraints ranks 4th among scenarios executives identify as most transformative for their
portfolios—but CRE teams rank it 7th of 8 on preparedness. Efficiency sits at the intersection of three
risks CRE can’t ignore: regulatory, financial and operational. Closing this gap addresses all three at
once.

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Disclaimer: This content is shared in partnership with JLL. The views expressed in the source article are those of JLL and do not necessarily reflect those of AEEA.