At the CREDA Conference in Denver, a “Beyond Green Buildings” session looked at how sustainability can create value in commercial real estate. Moderator Shawn Hesse, vice president of sustainability advisory at JLL, was joined by Alvaro Concha, senior project manager on JLL’s sustainability consulting team, and Cody Silva, who leads global realty investment and partnership programs at Amazon. Together, they made the case that solar, batteries and energy efficiency should be treated as tools that add power capacity to a site, and that the best way to deploy them is through partnership between landlords and tenants.
Why Power is Reshaping Industrial Value
Major occupiers have made big carbon commitments, yet tenants rarely bring up sustainability when a lease is negotiated. Hesse described that disconnect as the starting point for the work JLL and Amazon have been doing together, which focuses on translating broad market signals into decisions at the deal level. The signal that matters most today is power. As Hesse put it, “Everybody knows the thing that’s driving demand right now is power.”
Industrial power costs have risen 31% globally over the last five years and 18% in the U.S. JLL projects a 41% global gap between what occupiers need to meet their carbon goals and what is in the development pipeline. Meanwhile, about 75% of U.S. industrial stock is more than 10 years old and lacks the power capacity newer tenants need.
Regulation adds additional pressure. JLL finds that 81% of buildings in regulated markets are at risk of not meeting greenhouse gas standards, which makes quick fixes like on-site gas generation a risky long-term bet. The value side is catching up as well, with JLL’s early tracking showing that rooftop solar alone adds about 4% to industrial property value.
To learn whether energy upgrades could reduce risk and add value for both landlords and tenants, JLL analyzed about 70 sites across 10 markets in the U.S. and abroad. Alvaro shared three findings from the report. First, solar added value in every market by boosting NOI, resilience and marketability. Second, other technologies like EV charging depended on the market, so strategy has to match location. Third, timing matters. Starting the conversation three to five years before a lease expires gives landlords and tenants time to build a co-investment model where both come out ahead.
From Tenant to Partner
Power is hard to secure today, and Silva argued that many underwriting models haven’t caught up. A building without the capacity tenants need could look very different by the end of its next lease, yet landlords often see energy upgrades as a risk of their own, worrying that a future tenant won’t want electrified HVAC or a row of EV chargers.
Today, the tenant typically pays for these upgrades, including any power work that comes with them. Amazon instead wants to share the cost through financing that gives landlords what they’re after, which is cash flow and a real estate return on their capital. That can mean splitting capital costs, earning a return through a solar contract or future power purchase agreement, or structuring the deal around each party’s cost of capital. Now in roughly its third year, the program has been incredibly impactful, according to Silva, and other institutional firms are moving in the same direction.
Trust is what makes this process work. Hesse noted that JLL has sometimes built separate decarbonization plans for a landlord and a tenant at the same address, with neither talking to the other. Concha found that starting small, often with data sharing, quickly changes how landlords approach the conversation. For tenants, Silva’s advice was to meet landlords where they are. “If you’re on the tenant side, or you’re just very interested in sustainability, I would say learn the fundamentals of deal-making within the real estate environment and speak in terms of the landlord,” he said.
Three Takeaways for Building Value
- Sell power, not green. Tenants want power first. Position solar, batteries and efficiency as capacity and resilience that protect the asset.
- Start early and start small. Open the conversation three to five years before a lease expires. Share data. Add smart meters. Build trust before talking terms.
- Share the cost and the upside. Speak in rent, escalations and cost of capital. Explore co-investment, third-party developers and local incentives to make the numbers work for both sides.
Power is becoming the deciding factor in industrial real estate, and the buildings that have it will win the next generation of tenants. The panel showed that landlords and tenants don’t have to fight over who pays for that future. By starting early, building trust and sharing both the investment and the return, they can add capacity, reduce risk and create value together.
This post is brought to you by JLL, the social media and conference blog sponsor of the CREDA Conference 2026. Learn more about JLL at www.us.jll.com or www.jll.ca.
