The real estate industry is on the verge of significant infrastructure improvements, driven by the rise of electric vehicles (EVs) and the U.S. government’s commitment to phasing out internal combustion engines by 2035. As EV ownership becomes more prevalent, property owners and managers must anticipate the growing demand for charging stations, a critical factor in the evolving landscape of real estate.
Adapting to technological advancements is not new for property managers, who have witnessed various infrastructure upgrades over the years. From telephone lines to fax machines, dial-up internet, Cat 5 wiring, Wi-Fi, and now 5G and fibre optics, each progression rendered previous technologies obsolete. The emergence of EVs marks another pivotal moment, requiring the real estate industry to integrate charging stations seamlessly into its assets.
Literature extols the social and environmental benefits of electric vehicles, particularly in reducing carbon emissions. However, despite the push from vendors offering diverse charging station designs and revenue models, many property managers remain sceptical about the advantages EV technology brings to their assets.
A recent survey at the University of Wisconsin-Stout revealed that property managers, though acknowledging the inevitability of EV technology, are not rushing to adopt it. The reasons for this reluctance vary, prompting a closer look at considerations for installing EV charging stations, encompassing infrastructure and technology, service and revenue models, management policy, and environmental, social, and governance (ESG) concerns.
Infrastructure and technology choices play a crucial role in determining the success of EV charging stations. Stations are categorized into Level One, Level Two, and Level Three, each with its specifications and charging capabilities. Level Three stations, utilizing direct current (DC), are particularly practical for commercial and residential properties where individual power supply is neither feasible nor desirable. However, their installation requires robust utility company infrastructure.
Service and revenue models offer property managers different options, each with its demands and challenges. The purchase model involves property managers covering equipment and installation costs, retaining all revenue, and accepting associated liabilities. Full-service third-party vendors take care of all costs, revenue, and liabilities, with potential rent charges for the charging area. Revenue/cost sharing involves the vendor handling installation and service, with the property receiving a portion of the revenue. Careful consideration of these models and thorough contract review by experts is essential.
Management policies must evolve with the dynamic nature of EV charging, influenced by consumer needs and government regulations. “Right to charge” laws, allowing residents in multi-unit dwellings to install charging stations, must be considered, as they may impact potential revenue. Property owners must decide whether EV charging is an amenity or profit centre, whether it will be private or public, and what ongoing monitoring and security measures will be necessary.
ESG goals are increasingly crucial for corporations, with stakeholders closely monitoring their performance as responsible corporate citizens. EV charging stations contribute positively to a property’s ESG strategy, earning points toward certifications such as IREM Certified Sustainable Property (CSP) and LEED (Leadership in Energy and Environmental Design). The installation of EV charging stations aligns with public expectations, enhancing a property’s public image and contributing to broader ESG objectives.
In conclusion, the real estate industry stands at the forefront of a transformative era with the widespread adoption of electric vehicles. Property managers must proactively address the challenges and opportunities presented by EV charging stations, considering infrastructure, service models, management policies, and ESG goals. As the demand for EV technology continues to grow, the real estate industry must embrace these changes to stay ahead and meet the evolving needs of its residents and the broader community.
