By Laura Kucharczyk, executive managing director, JLL’s Project and Development Services
According to the World Bank Group, cities are home to more than half of the global population. While cities serve as hubs for business, culture, and tourism, they also account for 70% of CO₂ emissions.
As urban populations grow, climate risks intensify, and we approach the next decade—a milestone for climate progress—cities face mounting pressure to adapt their built environments, and retrofitting, the process of upgrading and enhancing existing assets to meet new standards or needs, has emerged as a critical solution. In a recent report from JLL and The Economist Impact, based on a survey of 1,000 senior business leaders in built environment sectors across 12 cities globally, nearly 70% of respondents report retrofitting has increased as a share of business over the past three years. However, to meet climate goals, retrofit rates must accelerate from 1% to 3% annually.
For Denver, retrofitting represents both an opportunity and a challenge, and scaling these sustainable efforts will require overcoming financial, regulatory, and technical barriers.
Trends Driving Retrofits Globally
As a key component of cities and their skylines, buildings alone contribute up to 60% of total urban carbon emissions through construction and operation, and as urban areas grow, retrofitting existing structures is essential to reduce emissions and create healthier spaces.
Beyond tackling approaching climate goals, cost savings (59%), enhanced asset market value (55%), and improved employee experience and productivity (43%) are the top three cited benefits of retrofitting. High-performing buildings attract tenants due to their energy efficiency, well-being benefits, and modernized spaces, and also offer building owners measurable ROI through rent premiums, lower operational costs, and increased asset value. Despite potentially higher upfront costs, even moderate retrofits can reduce energy costs by 30–60%, and deeper retrofits can transform energy savings by 40-60% in commercial and 60-90% in residential buildings.
In Denver, where many aging office towers remain underutilized, retrofitting also offers a pathway to reimagine downtown spaces. In Downtown Center, Towers 621 and 633 on 17th Street recently sold for $3.2 million—just $1 per square foot—highlighting the potential for mixed-use redevelopment, a concept that has been challenging due to financial constraints. Retrofitting these towers provides a path for a 700-unit residential building and encourages new downtown development.
Despite clear benefits, transforming buildings into new and improved, efficient spaces also presents challenges. According to the JLL/Economist Impact report, 61% of respondents cited financial hesitancy as the top barrier to retrofitting. Split incentives between tenants and owners further complicate financing, as those funding retrofits may not directly benefit. In states like Colorado, where companies more often build satellite offices rather than corporate headquarters, challenges also exist in the willingness to invest in high-cost retrofits. Cost remains a significant barrier locally, leading to more short-term renewals as owners wait for economic conditions to stabilize.
Further, policy frameworks in many markets remain a barrier for scaling retrofits, as 43% of respondents surveyed by JLL and The Economist Impact cited unclear or insufficient regulations as a hindrance to retrofitting progress. However, when considering what will accelerate retrofitting over the next five years, respondents pointed squarely at policy; 55% chose stricter codes, and 52% backed more generous incentives.
Pathways to Accelerate Retrofitting
While there is no singular approach to scaling retrofitting efforts, stakeholders can work together to overcome these challenges and foster more sustainable cities. Beyond policy changes, unlocking capital is also essential. Mechanisms like C-PACE financing, which has supported $4 billion in investments across 2,900 U.S. projects, offer a viable model to fund projects.
Technologies like AI and IoT can also further streamline retrofitting processes; in fact, JLL/The Economist Impact found that AI can optimize up to 65% of retrofit-related tasks, such as streamlining audits and enabling data-driven decisions. One example in Boston’s One Congress Tower achieved a 25% reduction in energy bills using AI-enabled predictive analytics. Integrating modern systems into older infrastructure poses technical challenges as well, given the new and ever-changing tech skills required and shortage of skilled labor – a major barrier according to over a quarter (28%) of respondents. Building a skilled workforce by embedding retrofitting into architectural education and creating clear career pathways can help sustain retrofitting momentum and prepare workers to meet growing demand.
Retrofitting is not just about reducing emissions; it’s about creating more livable spaces, boosting economic resilience, and ensuring cities thrive in the face of climate challenges. In cities throughout Colorado and beyond, embracing retrofitting as a strategic priority can unlock significant environmental, social, and economic benefits. Policymakers, businesses, and communities must work together to shift the mindset around retrofitting into an opportunity for a more sustainable future. Encouragingly, JLL/The Economist Impact found that 82% of respondents expect moderate or significant growth in retrofitting activity within the next five years.
Laura Kucharczyk is the executive managing director of JLL’s Project and Development Services team in the Rocky Mountains, Pacific Northwest, Phoenix, & Hawaii. Laura’s primary focus is on developing the teams in her region, instilling a positive culture, and collaborating across business lines to secure new business. Her calm demeanor, clear communication style, and strategic approach are critical to her success in all aspects of her role, including team leadership, business development, and project execution.
