Energy performance has moved from a sustainability talking point to a fundamental driver of commercial real estate operating costs, according to recent research from JLL. The firm finds that in seven major global office markets, the most energy-efficient buildings operate 43% to 75% cheaper each year than the least efficient stock in the same cities, translating into savings of between $1.58 and $5.13 per square foot.
Those differentials are widening as electricity prices climb, regulatory expectations tighten and grid capacity becomes more constrained. JLL notes that commercial power prices in six studied markets rose between 2020 and 2024 at rates 11% to 91% higher than local inflation. By contrast, over the longer 2016 to 2026 period, electricity costs ranged from 14% below inflation to 13% above it, highlighting how sharply energy has recently diverged from broader price trends.
Across certain regions, the acceleration is even more pronounced. JLL reports that electricity prices in the United Kingdom and Australia increased by 37% to 45% from 2021 to 2026, compared with inflation of roughly 26% over the same timeframe. These higher costs are compounding pressure on electrical grids already strained by electrification, surging data-center demand, manufacturing reshoring and the need to upgrade aging infrastructure. In this context, JLL argues that energy-efficient buildings not only reduce expenses but also mitigate exposure to price volatility.
Policy is adding another layer of urgency. JLL’s City Climate & Resilience Policy Tracker shows that 41% of 75 major cities now have enforceable building performance standards aimed at cutting consumption in what it calls the largest end user of energy: buildings. In the U.S., 16 jurisdictions have adopted such standards, with New York City already issuing fines under Local Law 97, while the European Union progresses toward minimum energy performance thresholds for buildings. The firm concludes that regulatory compliance now weighs as heavily as operating cost and asset value in the energy performance equation.
Despite these pressures, JLL sees a readiness gap in the CRE sector. A prior study of 46,600 buildings across 14 global markets found that about 66% underperformed relative to leading building performance standards. In its 2026 Future of Work survey, corporate leaders ranked energy efficiency to offset rising costs and grid constraints as the fourth most transformative scenario for real estate portfolios, yet CRE teams assessed their own preparedness only seventh out of eight scenarios. That disconnect suggests that many assets could face higher operating expenses and more stringent regulations without clear mitigation plans.
JLL emphasizes that bridging the gap does not always require large capital projects. The firm cites operational measures such as improved controls, preventive maintenance and more active management of existing systems as sources of measurable savings. One office example achieved a 27% reduction in energy use, saving about $100,000 annually, by optimizing HVAC temperature settings and schedules alone, with no upfront capital investment. The research recommends that owners embed power access, energy intensity and energy sources into standard due diligence, while occupiers, particularly power-intensive users, incorporate power availability and reliability into site selection and lease negotiations. JLL concludes that organizations treating energy efficiency as core infrastructure will be better positioned for future operating and regulatory conditions.
