Is Your Building's Electrical System Making It Un-Leasable?

Commercial real estate stakeholders could be overlooking one of the most crucial selling points of their rentals — the quality of the electrical system. Tenants have more devices and energy demands than ever, requiring property owners and investors to enhance their sites’ capabilities. Is outdated equipment the reason behind a slow leasing season? Uncover why electricity is a major player in tenant decision-making and how to accommodate them.

Why Electrical Upgrades Must Happen

Electricity demand has risen 1.3% every year for the past three years, and it will likely continue. More people are driving electric vehicles (EVs), requiring parking lots to have chargers. Agencies are developing artificial intelligence (AI) agents that demand higher computing potential. 

Additionally, most grid and electrical infrastructure is approaching 40 years old and performing ineffectively (this may be too harsh and I don’t that’s right. “Much of the existing grid and electrical infrastructure is 40 years or older and often performs inefficiently). Energy demands will continue to rise despite these flaws, so property owners must take action to prevent overloads and deliver consistent service.

Electrical upgrades benefit everyone because they prioritize energy efficiency, cut building emissions and save money. Lower utility costs are another way to make commercial properties more enticing to prospective renters. Energy-efficient equipment is a wonderful selling point, especially if competitors have yet to begin the process themselves.

Finally, properties could be more likely to retain tenants for longer because the building is safer and more reliable. Old hardware and electrical congestion may lead to hazards like electrocution or fires. Preventing these circumstances is vital for establishing a dependable reputation and building relationships with renters.

Signs a Building Needs New Electrical Infrastructure

If managers are uncertain whether their commercial property needs new electrical machinery or infrastructure, these are some of the most telling signs. (Is there any sourcing on these signs?

Inadequate Capacity

Advanced cybersecurity automation, high-tech communications devices and sensor-based technologies are only a few of the added pressures on electrical systems in the modern era. Most installations occurred before this equipment became commonplace in commercial settings, so the panels and wires could not anticipate their energy requirements. Expanding capacity and establishing dedicated circuits that could facilitate beyond current needs is important for long-term stability.

Frequent Power Outages

Circuits may overload or trip more often than they should. Tenants may have had to develop habits to compensate for a constantly strained system. These are indications of poor load management, requiring panel replacements, rewiring or other retrofits.

Insufficient Grounding

Fire and electrical codes require better grounding systems because they are safer and can handle higher voltages. Old commercial buildings may have yet to adopt better grounding. Make this a priority, as these mechanisms prevent power surges and protect connected tech from damage. If businesses hook up critical servers and data hard drives to these outlets, it could lead to irreversible damage.

Outdated Panels and Wires

It is a challenge to know how old the system is without looking inside the walls or having a deeper understanding of electrical panels. Contact a third-party professional to audit the property and determine the age of the components. Regardless of how well they are maintained, everything has a finite life cycle that is potentially shortened by overuse, environmental stimuli or corrosion.

How to Accommodate Electrical Improvements

It requires immense upfront costs and coordination to initiate an overhaul of commercial electrical systems. Gradual implementation is the best way to convince renters to commit, as conditions will only improve. These techniques will make the process as smooth as possible.

Phased Upgrades

Landlords can replace portions of the electrical system over time instead of everything at once. Stakeholders can go floor by floor or use a priority-based plan to focus on critical areas. It alleviates budgeting concerns, making it easier to justify high-quality upgrades instead of inexpensive alternatives to gain short-term benefits.

Properties may also install microgrids to supplement energy demands in the meantime. These are helpful for stabilizing distribution infrastructure, particularly in remote locations with minimal electrical assets.

Incentive Programs

Many programs exist at the federal, state and local levels to help corporations become more energy-efficient. Some utility companies are also willing to help because their contributions assist the larger grid. These include grants or green loans, while other organizations may donate LED lights or smart technologies to kick-start progress. Taking advantage of these resources will reduce costs and make buildings more sustainable.

Energy Awareness

Communicate with future renters about the importance of conscious energy consumption as the company upgrades the building. Curbing usage will minimize outages, downtime and service disruptions, while encouraging better habits moving forward. 

Establishing these expectations during lease-signing will lay the groundwork for mutually respectful manager-leasee relationships. It will also create a culture of energy awareness among the building occupants, extending the lifespan of newly installed systems.

Scaling Plans

Businesses must anticipate that technology will become more energy hungry. Additionally, renters will use more electronic assets to power their operations. Therefore, real estate experts must continually expand capacity to anticipate growing pressures.

A New Lease on Commercial Electrical Systems

Properties become more enticing to renters if they know their technologies are compatible with the infrastructure. Needs go beyond powering laptops and phones — commercial real estate needs to consider employees with EVs, engineers designing proprietary AIs and installation of advanced renewable energy systems. Apply these tips to enhance a property’s marketability while futureproofing it against continually ballooning power consumption.