The real estate industry may be undergoing some of its most significant infrastructure improvements as the electric vehicle (EV) takes hold and the U.S. government pursues the goal of ending the production of internal combustion engines by 2035. In the coming months and years, EVs will appear more often at properties of all types, and the owners of those vehicles will look for places to plug in. Since filling up a charge is not a two or three-minute process like filling a tank with fuel, the owner of an EV will likely want to charge while either at work or home. This convenience factor will make charging stations necessary for the real estate industry.
Property managers are no strangers to adapting their assets to meet the needs of modern technology. Over the years, the profession has seen many infrastructure improvements brought on by evolving technology. Consider the simple telephone line that eventually became multiple lines for the fax machine and dial-up computer, then Cat 5 wiring for network access, followed by Wi-Fi, and now 5G and fiber. Each successive upgrade rendered the previous technology nearly obsolete.
Literature abounds on electric vehicles’ social and environmental benefits, especially the green impact of reducing carbon emissions. Vendors are trying to attract property owners and managers with various charging station designs and revenue models. But many property managers, while accepting the inevitability of EV charging, are skeptical of the benefits the tech will bring to their assets.
A recent poll performed at the University of Wisconsin-Stout revealed that property managers who have not adopted the technology are in no hurry to do so. While nearly all respondents accepted the inevitability of EV technology, the reasons for reluctance to embrace it at their assets varied.
Considerations for installing EV charging stations at an asset generally fall into four main categories: infrastructure and technology, service and revenue models, management policy, and environmental, social, and governance (ESG) concerns.
Infrastructure and technology
Today’s EV charging stations fall into three categories, appropriately named Level One, Level Two, and Level Three. The Level One charger can be plugged into a standard 120-volt outlet. These may work well in an environment where a garage stall has power or where it can easily be provided. An eight-hour charge from a Level One station will yield about 40 miles.
Level Two chargers also utilize house current, but they plug into an outlet more like a dryer or an electric oven: 240 volts with a 40-amp breaker. A two-hour charge will also yield about 40 miles. A faster Level Two is also available at 240 volts, but an electrician must hardwire it. In a multifamily retrofit environment where garage space is available, standard three-prong or four-slot dryer outlets could be installed. The local utility company can then charge the energy usage to either the renter or the landlord. Remember that the building’s electric infrastructure would have to support the peak demand associated with use. Depending on the age of the asset, this could be a significant challenge when planning for EV charging installations.
Level Three units, instead of converting household alternating current (AC), fuel the vehicle’s battery directly with a strong surge of direct current (DC) native to the battery. These chargers can rapidly bring a car to full charge. The Level Three chargers are likely the most practical for commercial environments and residential properties, where power for individual units is neither practical nor desired. Installing Level Three stations for every apartment or office would be cost- and grid-prohibitive. Utility company infrastructure is vital in this case, as Level Three charging stations utilize three-phase, 480-volt currents at 4,000 amperes at peak usage.
Service and revenue models
It’s important that property managers and owners carefully consider the various limitations and options for EV charging available on the market. These will likely change as the marketplace evolves with increasing competition and technological advancement. Be sure that any providers under consideration have relevant expertise in the field and can provide examples of existing installations and references.
Online apps and social media accounts are starting to review facilities via “check-ins” and user ratings. While many charging stations operate without flaw, a quick review of these apps will reveal issues at charging stations in virtually every market. Common complaints include broken or damaged equipment, no access to customer service or extended charge times, poor signage, and the proximity of charging stations to other amenities.
Quality and service should be primary considerations, and there are essentially three cost/revenue models available, each presenting its own demands and challenges in keeping users satisfied.
- Purchase. The asset or property manager pays all equipment and installation costs, keeping all revenue and accepting associated liabilities. In some cases, the property can own the equipment but lease the operating network.
- Full-service third-party vendor. The provider is responsible for all costs associated with installation and operation, keeping all revenue and accepting all liabilities. Some assets may charge rent for the area used for charging. A user may pay a subscription fee that could include access to other stations in the vendor’s network. It’s important to remember that even with a full-service third-party vendor, the landlord is still involved. See management policies below.
- Revenue/cost sharing. The vendor is responsible for installation and service, and the property receives a portion of the revenue.
Each of the cost/revenue models and associated vendors needs to be studied carefully, as the arrangements are quite technical and challenging to understand. A local expert and your legal team should review all contracts, especially for safety, security, liability, and insurance requirements.
Management policy
EV charging is an ever-changing business consideration impacted by consumer needs and government regulation. Management policies, therefore, require careful analysis. For example, several states have in place a “right to charge” law. This legislation provides residents at multi-unit dwellings the right to install a charging station for individual use.
Laws of this nature should be considered when analyzing the benefits of property-based EV stations. Charging stations installed for individual use may impact potential revenue at a property-installed facility.
Arguably, the consumer benefits outweigh the management risks. In the UW-Stout poll referenced earlier, respondents who installed the amenity were very satisfied, and some consumers were willing to pay above-market rates for the convenience and reliability.
There are several fundamental management policies that property owners should consider when evaluating EV charging with their management team, including:
- Amenity or profit center? Management should decide early on whether an EV charging station will be an amenity, like a swimming pool or tennis court, or an opportunity for management to earn revenue.
- Private or public? Will the electric vehicle charging points (EVCP) be available to the general public or only to tenants or residents? If public, consider signage to attract customers. If private, consider how charging stations will be monitored and restricted to authorized users.
- What will ongoing monitoring of the space require?
- Will the charging area need security lighting, cameras, or other safety measures?
- What additional insurance will be necessary?
- How will the charging pedestals be protected from accidental damage by vehicles?
- What regulations will be needed to prevent improper use or extended parking in the space(s)?
- Will the parking area need any special maintenance? Maintenance considerations include stall cleaning, trash receptacles, and reinforced parking bases for heavier vehicles.
- Is the space designed to meet ADA requirements?
- Will the addition of EVCPs impact parking code requirements?
- Availability of national, state, and local subsidies or incentives
Experts agree that policy development should be a collaborative effort that includes the property owner/manager, tenants/residents of the property, utility providers, and municipalities. At this early stage of development, there are many confusing technologies and policies with few to no established best practices. As the demand for and capabilities of the technology evolve, IREM and other organizations will be here to advise on best practices and guide managers through the process.
ESG goals and EV
In response to public demand, corporations have made great strides in improving their performance as responsible corporate citizens. Stakeholders, including the investment community, customers, vendors, employees, and the general public, are paying close attention to firms on a broad range of ESG topics. Experts have indicated that these often-nonfinancial areas can also measure risk and long-term viability.
ESG reporting is not a requirement of public corporations, nor are there clear standards for such reports. But the investment community increasingly demands that firms define goals that address ESG issues in their communities. In the UW-Stout poll, those considering the installation of EV charging stations at their properties overwhelmingly stated that it would be a positive factor for their public image.
EV charging stations and a property-wide commitment to green building practices are essential components of an asset’s overall ESG strategy. Points are earned for these practices, which count toward IREM Certified Sustainable Property (CSP) and LEED (Leadership in Energy and Environmental Design) certifications, widely used rating systems for healthy, efficient buildings that offer ESG benefits.
From our polls, we know that respondents see how adding EV charging services will positively impact residents who have EVs and improve their image within the community.
Soon, EVs will be everywhere as car companies race to put them on the roads, and the demand continues to grow. Is your property ready?
Source: “Charging ahead“
