The Business Case for Deep Retrofit: How to Increase Asset Value, Slash Carbon, and Strengthen ESG Positioning
- Octavian Vasilovici
- Aug 12
- 3 min read
Today’s building owners face a shifting reality. Energy codes are tightening. Tenants are demanding greener, healthier spaces. Lenders and investors are factoring ESG metrics into valuations. And yet, many portfolios are still underperforming—not because of poor location or design, but because they haven’t evolved.
That’s where deep retrofits come in.
More than a basic upgrade, a deep retrofit rethinks a building’s entire performance profile—from envelope to energy systems to long-term cost efficiency. It’s not just about sustainability. It’s about asset strategy. And increasingly, the owners who act now are reaping the financial, operational, and reputational benefits.
Why Deep Retrofit Is Gaining Ground
1. A Tangible Impact on Market Value
A 2025 study published in Buildings (MDPI) found that deep energy retrofits can increase market value by 13.5% on average. These aren’t hypothetical premiums—they’re being realized in real-world transactions.
Buyers and investors are willing to pay more for high-performance assets. Why? Because energy-efficient buildings reduce operating costs, align with ESG mandates, and carry less long-term regulatory risk. Retrofitted properties also command better tenant retention and lease-up rates.
2. A Climate and Compliance Imperative
We can’t build our way to sustainability. According to Reuters (2024), 80% of the buildings we’ll use in 2050 already exist. To meet global climate goals, we need to retrofit 3% of global building stock annually.
New construction comes with significant embodied carbon—and often lengthy, risky development timelines. Deep retrofit, by contrast, offers a faster, greener path forward, especially in urban cores where redevelopment is constrained.
3. A Clear ESG Advantage
The Holcim Foundation reports that deep retrofits can reduce embodied carbon by 50–75% compared to new builds. But ESG isn’t just about carbon.
Retrofits send a signal to the market: this building is managed by forward-thinking owners. The result? Access to lower-cost financing, stronger investor confidence, and appeal to ESG-driven tenants.
How to Approach Retrofit Strategically
Done right, deep retrofits are a smart long-term investment. Done poorly, they disrupt tenants and drain capital. Owners need a roadmap—not just ambition.
The Retrofit Playbook for Large Buildings (Rocky Mountain Institute, 2025) outlines a phased, practical approach that we’ve also applied in real-world projects:
Phase 0: Set Clear Goals
Define the asset’s long-term function, ESG objectives, and tenant needs early. Don’t retrofit in a vacuum—retrofit with purpose.
Comprehensive Assessment
Evaluate systems, envelope, controls, and usage patterns. Benchmark current performance and identify the most cost-effective improvements.
Financial Modeling
Model ROI using tools that factor in:
Energy savings
Maintenance cost reduction
Tenant retention premiums
Access to green funding or incentives
This is where owners can align their capital plans with true value creation.
Phased Execution
Avoid tenant disruption by coordinating upgrades with lease cycles or planned vacancies. Retrofit isn’t all-or-nothing—it can be staged for operational continuity.
Why This Matters Now
Deep retrofits are no longer optional for owners who want to remain competitive. They:
Increase asset value through improved performance and marketability
Reduce operating expenses with measurable energy and maintenance savings
Strengthen ESG positioning, a growing driver of tenant and investor decisions
Extend building lifespan and defer costly future overhauls
In a tightening market, buildings that haven’t evolved will fall behind—both in value and in relevance.
Curious what a retrofit could unlock for your property?
OptiBuild helps building owners assess retrofit potential, model ROI, and align upgrades with both market demands and ESG goals.
Sources
MDPI. Buildings Journal: Market Value Impact of Deep Energy Retrofits. 2025
Reuters. Why the building sector needs a ‘make do and mend’ mentality. May 2024
Holcim Foundation. Eight Advantages of Retrofit. 2025
Rocky Mountain Institute. The Retrofit Playbook for Large Buildings. 2025
