Capacity Challenges – March 2, 2026
Energy resilience is now part of the equation in commercial real estate decision-making
The announcement last week that President Trump wants the major tech companies to supply their own power for artificial intelligence data centers is a sign of the times. “After decades of stable to limited load growth, electricity demand is now swiftly rising, with the [International Energy Agency] estimating growth of around 40% or more by 2035, far outpacing overall energy demand,” writes JLL’s Paulina Torres.
Appetite for data centers is just one factor behind the rising demand. Onshoring and reshoring, advanced manufacturing, automation and EV charging all play a part. As a result, energy availability and security is fast becoming a defining factor in commercial real estate decision-making, with critical implications for project viability, property values and building performance, JLL says in a new report, Where energy meets property.
“Energy disruptions are becoming a widespread business reality across sectors such as data centers, advanced manufacturing and life sciences,” said Josephine Tucker, JLL head of energy advisory and sustainability, Americas. “The classic real estate priorities are evolving from purely location-based to include energy resilience as equally critical factors.”
JLL identifies four structural forces disrupting the energy sector and the traditional role of CRE: electrification and accelerated load growth; legacy grid constraints; clean power deployment; and digitization and decentralization. This convergence is expanding real estate’s role in the energy value chain and creating new competitive advantages for properties with reliable power access.
In Silicon Valley, for example, high-power leases have transacted at rents 49% higher, on average, than other leases signed over the past three years, and 33% higher than rents achieved by the newest of buildings (i.e., those delivered within the past three years).
However, money itself is not the sole deciding factor. “Occupiers may have the capital to pay more for reliable energy; however, that does not resolve the underlying constraint,” writes Torres, global research director, sustainability at JLL. “In many markets, the primary limiting factor is no longer capital, land or labor, but available grid capacity. The surge in electricity demand is colliding with the physical realities of existing grid infrastructure.”
Although data centers may represent the poster child for surging power requirements, they’re projected to account for less than 10% of global electricity demand growth by 2030, behind several other industries. Industrial and logistics properties are experiencing similar pressures as automation and electrification reshape operations, says JLL. Manufacturing facilities with AI-driven processes, robotic systems and electrified equipment find their power requirements can be several multiples higher than traditional operations.
The expansion of EV charging beyond single-family homes into workplaces, retail and logistics properties has created additional strain across property types. Unmanaged EV charging infrastructure can more than triple a site’s peak power demand, the report says. Healthcare facilities, life sciences labs and other mission-critical facilities face additional complexity as sectors requiring continuous, highly reliable power.
“We’re seeing energy infrastructure and real estate values become permanently interlinked across major property sectors,” said Guy Grainger, global head of sustainability services at JLL. “Properties equipped with smart energy management and on-site power generation capabilities have a clear competitive advantage in today’s constrained environment. Energy security at operational facilities is now a boardroom discussion for business.”
In short, it’s a challenge with no easy answers. Yet CRE owners, developers and tenants across property sectors need to be among those asking the questions.