Commercial buildings are going green. Here are the names to buy, says Morgan Stanley

Kwanchai Lerttanapunyaporn |  EyeEm | Getty Images

Commercial buildings are set for an upgrade supercycle to improve energy efficiency, and there are a number of companies that stand to benefit, Morgan Stanley said in a recent note to clients.

The firm believes the market is underestimating the sheer opportunity for companies operating in the building retrofit market, as sustainability efforts and supportive legislation fuel upgrades.

"We see commercial building modernization as one of the best points of convergence between sustainability and technology in our coverage universe with one of the largest installed bases in the world," Morgan Stanley said.

"Technology, [environmental social and governance] awareness, an aging installed base, post-Covid changes, and funding mechanisms are coming together at what we believe are the early stages of a commercial building modernization supercycle in the U.S. and Europe," the firm added.