What the Push for Electrification Means for Commercial Buildings
5 min read
Across Canada and around the world, the transition toward electrification is rapidly reshaping how buildings are designed, powered, and operated. Driven by climate policy, evolving tenant expectations, and technology innovation, electrification is becoming a central focus in commercial real estate.
In this article, you’ll explore what electrification means for commercial buildings, the benefits and challenges it presents, and how property owners can prepare for a lower-carbon, electricity-powered future.
Why Electrification is Gaining Momentum
Electrification is a cornerstone of many governments’ plans to reduce greenhouse gas emissions and meet net-zero targets. In Canada, where the federal government has committed to net-zero by 2050, buildings are a key focus, accounting for roughly 18% of national emissions. As provinces update building codes and incentive programs to promote electrification, commercial properties are under increasing pressure to adapt. At the same time, growing ESG commitments and tenants’ demand for cleaner, more efficient spaces are pushing landlords to explore energy alternatives that align with sustainability goals.
What Electrification Looks Like in Practice
In commercial buildings, electrification typically involves replacing systems that use natural gas, oil, or other fossil fuels with electric technologies. This can include:
Heat pumps instead of gas-fired boilers for space heating and cooling
Electric water heaters replacing gas-fired models
Induction cooktops and commercial kitchen equipment
Electric vehicle (EV) charging infrastructure for tenants and fleets
All-electric HVAC and management systems
Benefits for Building Owners and Occupants
Fully electric buildings have the potential to significantly reduce carbon emissions, especially in regions where the electricity grid is relatively clean. This supports both regulatory compliance and investor expectations tied to ESC frameworks.
Modern electric systems, such as variable refrigerant flow (VRF) heat pumps, are highly efficient and can lead to significant long-term savings on operational costs. They also reduce maintenance complexity compared to fossil fuel systems.
Electrified buildings offer health, comfort, and environmental benefits that align with today’s tenants, especially institutional and corporate occupiers, who are actively seeking.
Challenges to Consider
While the benefits are clear, the transition to electrification isn’t without challenges
Upfront Costs: Retrofitting older buildings can be expensive, especially when it involves upgrades to electrical capacity or reworking mechanical systems.
Grid Capacity: As more buildings electrify and EV charging expands, local utility infrastructure must keep pace, posing potential limitations.
Technical Integration: New systems must be properly integrated with building automation platforms to maximize efficiency and reliability.
How to Prepare for Electrification
For CRE owners and managers, the key is proactive planning. Steps to take include:
Conducting an energy audit to identify electrification opportunities.
Engage consultants to develop a phased retrofit strategy
Explore incentive programs and financial support for upgrades
Investing in future-ready infrastructure
Prioritizing electrification in new developments and capital planning
The push for electrification is more than a trend; it’s a transformation that’s reshaping commercial buildings from the inside out. For property owners and investors, embracing this shift is ot only a way to reduce emissions and align with environmental targets, but also a strategy to improve building performance, tenant satisfaction, and long-term asset value. As policies tighten and market expectations rise, electrification is becoming a defining feature of the next generation of commercial real estate.
References
BOMA International. (2023, June 22). Electrification study 2023. https://www.bomaconvention.org/BOMA2023/custom/BOMA%20Electrification%20Study%20Draft%202023-06-22.pdf
Bowen, T. (2025, April 16). Electrification for commercial spaces saves money. Qmerit. https://qmerit.com/blog/electrification-for-commercial-properties-improvements-for-2024/
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