The Commercial Real Estate Development Association (CREDA) Research Foundation (formerly the NAIOP Research Foundation) today released a new report examining how electric grid reliability is increasingly influencing commercial real estate development, investment and operations.

“Electric Grid Reliability and Commercial Real Estate” explores the implications of rising electricity demand, aging infrastructure and grid capacity constraints for developers, investors, owners and occupiers across property sectors.

Drawing on research conducted by the Hickey Institute, the report highlights how power availability and reliability have evolved from operational considerations into strategic factors that affect site selection, development feasibility, tenant demand and long-term asset value.

Key Findings:

• Demand for electricity is surging due to rapid growth in power-intensive uses such as electric vehicle charging, AI-driven data centers and cold storage facilities, while baseload power capacity is contracting.
• Commercial building owners can often pass rising utility costs on to tenants, but increasing electricity costs may reduce a property’s competitiveness in power-constrained markets.
• Texas, the Southwest and major data center corridors face some of the most significant grid capacity challenges, resulting in longer development timelines and higher infrastructure costs.
• Power availability has become an increasingly important part of site selection, while resiliency features such as backup power systems, energy-efficient design and on-site renewable generation can enhance competitiveness and support rent premiums.
• Developers are conducting utility due diligence earlier in the development process and, in some cases, funding infrastructure improvements to secure capacity and accelerate project delivery.
• Addressing the challenges facing the grid will ultimately require federal and state policy solutions, but developers can partner with local officials and utility companies on capacity planning to better align infrastructure investments with development pipelines.

"Access to reliable power has rapidly become a competitive differentiator in commercial real estate," said Marc Selvitelli, CAE, president and CEO of the Commercial Real Estate Development Association. "As demand accelerates and grid constraints become more common, developers and investors must incorporate energy availability and resilience into their decision-making. This report provides practical guidance for navigating this increasingly complex landscape."

The report was prepared by the Hickey Institute, which produces independent research and analysis on corporate location strategy, economic development and investment trends.

Download the full report at credaresearch.foundation