Real estate is ready to get plugged into the electric vehicle revolution.
With thousands of new electric automobiles hitting the road every day, owners of everything from offices to apartment buildings are being pressured to provide charging stations for their tenants.
But who pays for installing what ultimately could be millions of chargers and how they are financed remains up in the air.
“Real estate owners are trying to grapple on what they need to build as more people adopt electric vehicles,” said Jim Hurless, real estate EV leader with CBRE Group. “There is a fear of the unknown.”
What is known is that building owners are lagging consumers in the adoption of electric vehicles.
Nationally, there are now more than 2.2 million electric vehicles on U.S. roads. Texas trails only California and Florida in registered EVs. More than 200,000 EVs are traveling Texas roads, with nearly 37% of those in Dallas-Fort Worth, according to tracking by D-FW Clean Cities.
“By 2045, EVs are projected to dominate most of the car market,” said Yardi Systems’ business intelligence manager Doug Ressler said in a new report. “Moreover, by 2050, EVs could make up about 90% of the car market.”
That could create a mismatch. Property landlords estimate that less than 5% of their apartments and office buildings have chargers available for tenants.
“As we transition to electrical vehicles, whether it’s retail, multifamily or office, everyone is going to need to prepare for recharging,” Andrew Bailey, an officer with EnviroSpark, said last week at a meeting of the National Association of Real Estate Editors.
EnviroSpark is an Atlanta-based company that bills itself as an industry leader in the design, installation and operation of EV charging stations.
“Demand is coming,” Bailey said. “There is a lot of preparation that needs to take place to get ready. Eighty percent of charging is done at home today. With 30% to 35% of Americans in multifamily, this is a huge need.”
EnviroSpark is one of several companies that’s installing and operating EV charging ports on properties. Bailey said the firm has built more than 7,000 charging stations in 28 states.
“It’s really starting to take off,” he said. “We are starting multiple property deals with a lot of the real estate owners.”
Apartments that don’t provide tenants with the option to charge their cars won’t get the business, said David Aaronson, CEO of Refuel Electric Vehicle Solutions.
“They go to the internet and check out if the property has charging stations,” Aaronson said. “Every apartment property in America is going to need to have EV charging stations.”
But not all apartment communities have the power infrastructure needed, he said.
“Ninety-nine percent don’t have the electrical capacity to meet the future demand,” Aaronson said. “The apartments that are existing today, none of them were planned with the assumption you need electricity to charge 200 or 300 or 400 automobiles.
“There is no way to get them enough electricity to charge that many automobiles,” he said. “We try to put in infrastructure for as many as we have capacity to do.”
There’s also the cost of the equipment.
“A level 2 charging station on average in an existing property costs us about $8,000 or $9,000 per charging port to put up,” Aaronson said. “If you put up two of them or one dual station, it’s going to cost you somewhere in the $15,000 to $20,000 range.”
Aaronson said the cost of installing chargers could be a non-starter for some condominium homeowners.
“The person that lives in unit 10 doesn’t own an EV and doesn’t want to have their association spend a nickel on it,” he said. “It’s a big problem.”
But apartment, condo or office building owners can contract with an EV charging service provider that installs and maintains the equipment. Along with an amenity for tenants, the charging stations can provide a shared revenue stream for the property owner and installer.
“They have never gotten free gasoline when they have gone to the apartment complex,” Aaronson said. “People expect to pay for the fuel for their car. It represents an opportunity to develop a new revenue stream for multifamily owners. They have a captive audience.”
McKinney-based Humm Energy just signed a charging station agreement with the Bleu Ciel condo tower north of downtown Dallas. And Dallas-based apartment builder StreetLights Residential recently contracted with New York-based Xeal Energy to install over 100 charging stations at 14 apartment communities across the Sun Belt.
StreetLights CEO Doug Chesnut said the developer, which has several new projects in the Dallas area, installed 30 vehicle chargers in its new apartment building in Atlanta.
“Although we may not have 30 EVs at the property off the bat, we’re preparing for the growing need, especially at our urban high-rises,” Chesnut said. “We see superchargers as an essential service and amenity for our emerging residents. StreetLights is planning to install superchargers at our upcoming projects across the country.”
Dallas-based CBRE Group, one of the world’s largest real estate service firms, recently created a new division to help building owners identify locations for charging sites, as well as to help plan, install and maintain the equipment.
CBRE’s Hurless said building owners can only do so much.
“The world cannot provide one charger for every electric vehicle,” he said. “You can’t charge all the cars everywhere at once.”
Corporations looking to install electric chargers at office campus sites have to decide if they want to be in the vehicle fueling business.
“The people who drive gas vehicles don’t have the same benefit,” Hurless said. “That’s one of the conversations HR people are having. You are still going to need chargers at home.”
Regardless of who pays for chargers and which properties provide them, Hurless said the U.S. rollout lags what he’s seeing in some countries in Europe and Asia.
“They are producing EV charging infrastructure at a much much faster rate,” he said. “They are far ahead.”