Keeping the lights on and leveling the built environment up

The latest in real estate technology

March 28th, 2025

Keeping the lights on and leveling the built environment up

Real estate stakeholders are facing seismic shifts, whether they’re developers, owners, operators, investors, PropTech companies, or even curious tenants. Electricity demand is rising for the first time in a long time, regulations are changing left and right, and building (or rebuilding) for a more resilient future is gaining urgency. This is especially true as the first quarter of this year has seen substantial challenges and devastating disasters on the ground.

That said, wherever there’s challenge, uncertainty, and risk, there’s also opportunity. Specific to the topic of real estate and the built environment, in 2025, there’s substantial space to drive improved economic, environmental, and experiential outcomes for occupants and owners alike.

Today’s newsletter homes in on energy, specifically as it intersects with the built environment. We’ll explore which push-and-pull factors are most salient, where new tech is plugging in, and why this topic is worth your attention. (One off the top of our head: energy costs often represent one-third of operating expenses for many commercial real estate properties.)

A new paradigm

For decades, electricity demand growth in the U.S. was modest, if not flat. Now, the grid, which, mind you—consists of a mind-boggling amount of hardware, much of which is at or near the end of its useful life—struggles to keep pace with growing electricity demand. Yes, AI and data centers are big drivers of this trend. But whether in the U.S. or globally, so are growing building heating and cooling needs, rising EV adoption and EV charging demand, as well as general macroeconomic drivers, such as expanding electricity access in general (5%+ people globally still have little to no electricity access, mostly in sub-Saharan Africa).

According to the DOE, 70% of transmission lines are "over 25 years old and approaching the end of their typical 50–80-year lifecycle." More reading here.

As we noted earlier, energy can represent at least a third of a building's operating expenses. This percentage could climb as rates increase, and the volatility of natural gas and fuel oil prices adds another layer of uncertainty for properties reliant on them.

Existing infrastructure is failing

In parallel to rising energy demand, existing infrastructure is faltering: The above-noted demand growth comes at a somewhat inopportune time. Whether because infrastructure is old or because of natural disaster-related disruptions, a lot of physical energy and built environment infrastructure is already under stress before you add any more literal and figurative “load.”

While routing power to real estate assets is not necessarily simple nor straightforward (even a new grid connection can take quite some time, whether for new energy projects, buildings, or otherwise), forward-thinking property owners can generate energy themselves to turn a challenge into a competitive advantage. Even as it was presented in the context of AI-driven energy demand growth, Brendan Wallace, Fifth Wall’s CEO and Chief Investment Officer, has been hammering home the point that increasingly, the real estate and energy sectors are on a collision, if not a wholesale convergence course:

“...real estate firms are now in the energy business. Owners and developers aren’t just leasing land…they’re actively investing in energy infrastructure [to generate or otherwise source] power... At Fifth Wall, we see this as one of the most transformative opportunities in real estate and PropTech.”

A trio of examples from the Fifth Wall portfolio

Here are some examples of Fifth Wall portfolio companies that are hard at work bridging the gap between existing built environment infrastructure and the energy demands and occupant desires of the future.

Runwise operates a combination of hardware and software in over 7,500 buildings, addressing inefficient heating systems and helping cut fuel consumption by 20% or more. This translates to both cost savings and emissions reductions for property owners. To date, the company claims to have saved more than $70M in energy costs for customers.
Aurora Solar focuses on facilitating on-site energy generation. Its design software streamlines the solar installation process, making cleaner energy more accessible for property owners by cutting soft costs and turning buildings into active energy producers rather than passive energy consumers.
SPAN offers a smart electrical panel that provides a more granular control layer—allowing property managers to prioritize critical systems during outages, maximize self-consumption of on-site generation, and participate in grid service programs that were previously inaccessible to most buildings.

An artist’s rendering of the Span Edge, a new product from startup Span that integrates smart electrical panel controls into a utility electrical meter-connectible system. (Span)