The Dominant Expense for Commercial Real Estate Owners in 2025

December 10, 2024 - 10:34

Labor, capital, taxes, and land are certainly significant costs for commercial real estate (CRE) owners. However, one expense is set to eclipse all others in importance by 2025. As the industry evolves, the focus on operational costs is shifting dramatically. The rising cost of utilities, particularly energy expenses, is becoming the leading concern for property owners.

As sustainability becomes a priority, CRE owners are faced with the challenge of investing in energy-efficient technologies and practices. This shift not only aims to reduce carbon footprints but also to manage skyrocketing utility bills that can significantly impact overall profitability.

Moreover, regulatory changes and incentives for green energy usage are pushing owners to rethink their operational strategies. With energy costs projected to increase, CRE owners must adapt by incorporating renewable energy sources and enhancing building efficiencies to mitigate these expenses. The landscape of commercial real estate is changing, and those who proactively manage energy costs will be better positioned for success in the coming years.