Soaring gas prices and heavy investment in the electric vehicle marketplace is spurring consumer interest in electric cars, leaving commercial property investors wondering if they need to promptly invest in Electric Vehicle (EV) charging stations.
Boston real estate investors should be taking note: The city was recently named one of Ford Motor Co.’s top 25 EV-ready cities, and it’s a candidate for electric vehicle infrastructure grants through the Massachusetts Department of Energy and Environmental Affairs.
Considering the momentum, commercial real estate owners and managers need to focus on the challenges associated with EV technology and how to maximize the benefits of investing in an early trend.
A Growing Trend
In 2009, the Department of Energy awarded $2.4 billion in stimulus money to various entities to build electric vehicles and develop a charging station infrastructure, spurring the electric car’s growth.
In fact, cumulative investment in national and regional charging station infrastructure is projected to reach between $5 billion and $10 billion by 2015, according to information from the Electric Drive Transportation Association (EDTA). Further, an estimated 20 electric car models are expected to hit the marketplace and roadways by 2012.
As demand for electric vehicles continues to grow, so will the demand for more EV charging stations – a reality that is going to hit the real estate market. As a result, owners and managers need a clear understanding of how to best tackle this issue.
Making The Connection
Before determining whether to invest, owners and managers must first understand the technology. EV charging stations supply electricity to electric cars so they can run without fuel. Electric cars connect to charging stations either through a direct cord to a standard wall outlet, or to a stand-alone unit for a faster charge. Once connected, the chargers send electricity from the power grid.
Three types of chargers currently exist in the marketplace – the level one, or trickle charger; the level two, or parking charger; and the level three, or rapid charger.
The level two parking charger is probably most ideal for commercial properties. It charges a car in three to five hours and typically costs between $5,000 and $10,000.
All charging stations are designed with built-in safeguards, protecting against fears of electrocution in inclement weather. Some mandatory safeguards include outdoor enclosures, controller power of the device and over-current protection.
Charging stations require little maintenance, only needing periodic simple monitoring and minor preventative maintenance programs. In addition, they can be placed essentially anywhere. Site placement is dictated by usage, demand, and owner and manager preference more than anything else.
Consider The Possibilities
Beyond understanding the technology, real estate investors need to consider a host of factors to determine whether EV charging stations would be a viable solution at their properties.
First, they should consider their motivations – whether it’s property owner interest in charging stations; tenants’ demands for such stations; available government funding for implementation; or the desire to be on the cutting edge of this technology. Understanding these motivations will help ensure investment goals are met.
Understanding potential users is also important. Tenants should be surveyed about their employees’ and visitors’ commuting habits; their electric vehicle usage or interest in purchasing such cars in the near future; and whether they would value having charging stations at their disposal. The number of tenants, types of tenants, and the types of cars the charging stations need to support should also be taken into consideration.
Such surveys will answer logistical questions, such as where to locate the stations; whether wall-hanging charging stations or free-standing charging stations would be appropriate; user availability in terms of hours of operation and who can use the charging stations; and whether EV parking will be an amenity or require a fee.
Need Directions?
The EV market is a new territory, raising questions among commercial investors. A wealth of resources is available, including information on the EDTA’s website, and in EV World, an online publication with electric vehicle news. Charging station manufacturers and installation companies can also be of assistance.
Jones Lang LaSalle – in partnership with Eaton Corp., a power management company, and WESCO Distribution, which distributes charging stations – has developed an internal education program for the firm’s managers and executives that aims to address common concerns about charging stations. The firm also has an electric vehicle task force to further weigh and work out the challenges.
This emerging trend warrants close evaluation by commercial property investors, so that if and when the EV marketplace explodes, they aren’t running on empty.
Bob Best is a senior vice president and head of Jones Lang LaSalle’s electric vehicle task force.
