Do Buildings With Reliable Onsite Power Command Higher Rents?
Power availability is moving into the same conversation as location and parking. New data from JLL shows tenants are already paying a measurable premium for buildings that can guarantee it.
By Keith Reynolds | Publisher & Editor, ChargedUp!
JLL reports that tenants are paying measurable power premiums for buildings with dependable energy systems, reaching 49 percent in some cases. As grid constraints and surging electricity demand make reliable power scarce, energy resilience is becoming a competitive factor alongside location in how commercial space is valued and leased. Commercial distributed energy has grown fivefold since 2020, a sign that owners are responding to what tenants will pay for.
Key Facts at a Glance
JLL found tenants willing to pay measurable power premiums for properties with dependable energy systems, reaching 49 percent in some cases.
Commercial distributed energy resources expanded fivefold from 2020 to 2025, as global energy transition investment reached a record $2.3 trillion.
Power availability is emerging as a site-selection factor on par with location, particularly for power-intensive and mission-critical tenants.
Durable energy savings flow into net operating income, and property value rises with NOI at the market capitalization rate.
Industrial, logistics and data-center-adjacent assets show the clearest premium, where an outage or a power shortfall directly halts the tenant's business.
Are Tenants Really Paying More for Power-Secure Buildings?
JLL reports that tenants are demonstrating clear willingness to pay higher rents for properties with dependable energy systems, with measurable power premiums reaching 49 percent in some cases. The figure is not a market-wide average, and it reflects specific high-demand situations, but the direction is unambiguous. Where power is scarce and a tenant's operations depend on it, that tenant will pay to secure it, and the building that can offer guaranteed capacity captures the difference.
Behind the premium is a supply problem. Utility interconnection for large loads can take years, and grid capacity in the densest markets is spoken for. A building that already has secured power, through onsite generation, storage or a firm interconnection, offers something a competitor cannot conjure on demand. Scarcity is doing what scarcity always does to price.
Why Is Power Availability Becoming a Location Factor?
For decades, commercial site selection turned on location, access and cost per square foot. Power was assumed. That assumption has broken. Artificial intelligence data centers, electrification and manufacturing are straining grids faster than utilities can expand them, and the result is a market where secured electricity is a scarce input rather than a given.
JLL frames the shift directly, noting that energy resilience has become a critical competitive factor alongside traditional location considerations. The scale of the response supports that framing: commercial distributed energy resources expanded fivefold from 2020 to 2025 as global energy transition investment reached a record $2.3 trillion. Owners are adding onsite power because the market is beginning to price the buildings that have it above the buildings that do not.
Which Property Types See the Premium Most?
The premium concentrates where power failure stops the business. Industrial and logistics tenants, whose automated operations and cold storage cannot tolerate an outage, place the highest value on guaranteed power and backup. Data-center-adjacent uses, from the supply chain to colocation, treat secured capacity as a precondition for signing at all. Manufacturing, laboratories and healthcare fall in the same category, where a power shortfall carries direct operational cost.
Office and retail sit lower on the curve today, though rising demand charges and reliability concerns are pulling them into the conversation. For an owner, the practical read is to match the energy investment to the tenant. A logistics landlord competing for a power-hungry tenant has a stronger case for onsite generation than a suburban office owner, and the premium should be underwritten to the specific tenant demand in the local market rather than a blanket assumption.
How Should Owners Position Onsite Power?
Owners capturing this premium treat energy as a leasing and underwriting asset, not a facilities line. That means marketing guaranteed power and resilience as an amenity in the same breath as location and build-out, structuring leases so the value of reliable, lower-cost power is shared and visible to the tenant, and reflecting the durable savings in net operating income where buyers and appraisers will credit them. Reliable power has moved from a building system to a competitive position, and the owners who recognize that will benefit financially.
Frequently Asked Questions
Is the 49 percent premium a market-wide figure?
No. JLL describes it as a measurable premium reaching 49 percent in some cases, not an average across all properties. It reflects specific high-demand situations where power is scarce and a tenant's operations depend on it. The broader point is that reliable power now carries a rent premium at all, and it is measurable.
Does onsite power raise a property's value directly?
Indirectly, through net operating income. Durable reductions in energy cost, and any premium rent a power-secure building commands, raise NOI, and property value rises with NOI at the market capitalization rate. Buyers and appraisers must believe the savings and the premium are durable and transferable for the value to hold at sale.
Which tenants pay the most for reliable power?
Tenants whose business stops when the power does: industrial and logistics operators, cold storage, data-center-adjacent uses, manufacturing, laboratories and healthcare. Office and retail value it less today, though rising costs and reliability concerns are increasing their attention to it.
Sources
JLL, Power availability becoming key driver of CRE value: https://www.jll.com/en-us/newsroom/power-availability-becoming-key-driver-of-cre-value
JLL, Where energy meets property: https://www.jll.com/en-us/insights/where-energy-meets-property
Energy Changemakers, Onsite energy boosting commercial property value: https://energychangemakers.com/onsite-energy-boosting-commercial-property-value/
