The EV Slowdown Could Supercharge Building Energy Storage

• From EVs to EBs: Trouble in the EV market could jumpstart a new era of affordable battery storage for buildings.

• Seeing green: SL Green makes a play for a New York office recovery with one of the largest acquisitions this year.

• Cash for conversions: Notable investors have funded Derby Lane with $1.8 billion to acquire and convert struggling office buildings.

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Editor’s Pick

The EV Slowdown Could Supercharge Building Energy Storage

Battery makers are being forced to pivot. With electric vehicle sales plateauing after years of explosive growth, companies that built their fortunes on powering cars are now looking to power buildings instead. The global slowdown in EV demand has left manufacturers with excess production capacity and falling margins. That’s leading many to redirect their focus toward stationary energy storage including batteries designed to help stabilize power grids, manage peak loads, and provide backup power for homes and commercial buildings. This pivot isn’t just about market diversification, it’s about survival. And in the process, it could reshape how buildings manage energy.

For years, battery storage in buildings has been more promise than practice. The technology was available, but the economics rarely penciled. Between high upfront costs, regulatory hurdles, and uncertain payback timelines, most property owners viewed battery systems as futuristic luxuries rather than essential infrastructure. Now, that calculus may be changing. Battery makers are now moving aggressively into grid storage to offset weak EV demand. That shift could accelerate cost declines that make battery installations feasible for the broader commercial market. In fact, the average price of lithium-ion battery packs has dropped nearly 20 percent this year, according to BloombergNEF, and that trend is likely to continue as production capacity catches up with demand.

This change comes at a time when buildings are under mounting pressure to control energy costs and carbon footprints. Office towers, industrial parks, and multifamily complexes are increasingly competing for reliable, affordable power—and battery systems could provide both. Just as importantly, they can offer resilience in an era of grid instability and weather-related outages.

The timing couldn’t be better: energy storage could be the missing piece for many real estate portfolios trying to hit ESG targets while hedging against rising utility costs. As new battery startups like Base Power raise massive funding rounds ($1 billion in their case) to deploy next-generation storage networks, the opportunity for buildings to integrate into the energy transition has never been more tangible.

Still, the economics aren’t entirely straightforward. Even as prices fall, building-scale batteries remain capital-intensive and complex to install. Property owners must navigate permitting, interconnection agreements, and utility rate structures that weren’t designed for distributed storage. In some cases, the financial benefits hinge on time-of-use pricing or grid services that vary widely by region. But as costs drop and grid operators increasingly incentivize distributed storage, the balance is shifting. Batteries are beginning to move from “nice to have” to “need to have” for certain asset classes—particularly those in markets with volatile power prices or aging electrical infrastructure.

If EV sales defined the last decade of battery innovation, buildings could define the next one. The same technologies that powered cars across continents are now being retrofitted to power the built environment. What was once a byproduct of an automotive boom could become a foundational element of real estate operations. For building owners, that might mean it’s time to look again at a technology they once wrote off as too costly.

Overheard

SL Green Raises Stakes in Manhattan Office Bounceback

SL Green is making a bold statement with its $730 million purchase of Park Avenue Tower, one of New York’s biggest office deals this year. The 36-story Midtown building is almost fully leased, showing that high-quality assets can still attract both tenants and investors. The acquisition feels like more than just a property play—it’s a vote of confidence in Manhattan’s office market at a time when many are still sitting on the sidelines.

The move follows a strong quarter for SL Green, which reported $169 million in net cash from operations, up from $137 million a year earlier. Leasing volume is also climbing, with more than 400,000 square feet of new deals signed across its portfolio. The company's Chief Investment Officer summed up its strategy on its earnings call: “Volatility yields opportunity.” After years of debt reduction and asset sales, SL Green is in a position to move while prices are still low, turning market uncertainty into buying power.

This deal is part of a broader story about stability returning to the top of the market. Park Avenue Tower’s occupancy and location make it a relatively safe bet, but it also signals that New York’s premier landlords are ready to buy again. SL Green isn’t just waiting for recovery, it’s trying to shape it by showing that conviction and cash flow might be enough to rebuild confidence in the city’s embattled office sector.

$1.8 Billion Bet on the Future of Office-to-Residential Conversions

Adam Piekarski’s launch of Derby Lane Partners with $1.8 billion in commitments is a standout moment in real estate finance. With backing from Fortress Investment Group and Koch Real Estate Investments, the firm has over $5 billion in lending capacity when leveraged. Its first deal—a $62 million loan for the conversion of 65 East Wacker Place in Chicago—illustrates where many investors see opportunity: transforming outdated office towers into housing. For Piekarski, a veteran of BDT & MSD Partners and Goldman Sachs, the timing couldn’t be better. With lower valuations and greater market clarity, he sees a lending environment reminiscent of the post-crisis rebound, though this time the issue isn’t bad debt, but obsolete buildings.

The office-to-residential trend underscores how complex and capital-intensive these deals have become. The Wacker Place project, led by Mavrek and ACRES Commercial Realty, layers senior and mezzanine loans with $17 million in federal and state historic tax credits to make the numbers work. Conversions often cost upward of $400 per square foot due to upgrades for seismic standards, HVAC, and windows, leaving little room for error. For lenders like Derby Lane, that complexity creates opportunity. Traditional banks have pulled back from construction lending, and private credit firms are filling the gap—offering structured debt to experienced developers who can navigate the financial and regulatory maze.

Still, conversions remain the exception, not the rule. Even with creative financing and incentives like tax abatements or low-interest loans, many vacant towers don’t yet pencil. Cities such as Chicago, Denver, and Washington, D.C. are experimenting with policy tools to close that gap, hoping to turn underused offices into housing that meets social needs and stabilizes downtowns. Firms like Derby Lane are betting that as more projects succeed, capital will follow, and adaptive reuse will evolve from niche strategy to mainstream asset class. For now, they’re among the few positioned to turn today’s urban distress into tomorrow’s opportunity.

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