December 15, 2022

Implications of EV Chargers for Commercial Real Estate

5 Min. Read

Higher rates of EV adoption are resulting in increased demand for charging. At-home charging is emerging as a go-to solution for a majority of EV owners, but there are opportunities to explore in the commercial real estate market as well.

By offering EV charging to tenants, employees, hotel guests, or shoppers, you can establish yourself as an electrification leader.

How does EV charging impact commercial real estate in terms of revenues?

Global EV sales were up by 75% in Q1 2022 compared to the previous year, creating a significant demand for EV charging at home and in a wide range of commercial locations:

Overnight charging can become an appealing amenity for multifamily housing communities.
Office buildings can attract sustainability-forward businesses and eco-conscious employees.
Retail properties can offer top-off charging while EV owners run a few errands.
Hotels offering EV charging can make planning a trip out of town a lot easier for EV owners.
Private parking lots can also diversify their sources of revenue with EV charging stations.

Commercial EV charging is still at an early stage. Early adopters don’t necessarily have existing revenue models to base their projects on and must study charging patterns to find the best way to bill EV owners for this service.

For instance, a multifamily property can offer a monthly pass as an add-on or roll the cost of charging into the rent to offer this service as a free amenity. Private parking lots can bill by the hour or use a subscription model where users can purchase a certain number of weekly or monthly hours at a discounted or tiered rate.

When looking at the impact of EV charging on commercial real estate, it’s important to understand that not all properties will have the same opportunities to generate revenues. Although EV adoption is up overall, electric vehicle adoption rates can vary from one region to another. Your location and accessibility are also crucial considerations when it comes to the significance EV charging stations will have for your property.

Additional considerations for commercial EV charging

Does offering EV charging impact commercial real estate beyond generating revenues? EV charging stations are visible building features that can shape how people perceive your business and can work to establish your brand as an environmental leader.

Investing in EV charging sends a strong message and can appeal to investors and partners who value environmental, social, and governance factors, and with more than 50% of consumers saying sustainability was more important to them in 2022 compared to 2021, EV chargers can attract tenants, guests, or customers who would rather support a business that shares their values. In short, offering EV charging will direct more traffic to your business.

To further supplement this opportunity for increased revenue, you can offer additional services or products to EV owners while they wait for their batteries to charge. Gas stations already use this one-stop model to generate revenues with attached convenience stores, a market that is worth $250 billion.

Potential barriers and how to address them

Charging infrastructure represents a major investment in the future of electrification. Understanding the barriers that stand in the way of this project is crucial for proper planning.

Usage

How will the rising transition to electric cars and the accompanying need for increased EV charging accessibility impact commercial real estate in the near future? The overall demand for charging is increasing with only one charger available per 12 EVs at this time, however, regional patterns remain difficult to predict and the adoption of EVs is unequally distributed between states, counties, and cities.

Conducting a survey among your tenants or current customers to find out how many already have an EV or are planning an EV purchase will give you greater insight into the impact on your region and clientele. This initial step will also give you a better idea of the usage rate you can expect to see with EV charging stations on your property.

Installation and maintenance

EV charging is a relatively new technology and the lack of familiarity with the equipment can make the installation process seem more complex than it is.

A commercial installation may require a panel upgrade so you can accommodate multiple chargers. Additionally, you might have to upgrade your parking infrastructure to improve accessibility to the chargers.

Maintenance on the charging stations is minimal, but it’s important to keep the equipment clean and to regularly inspect the different components of your chargers.

Having a professional involved during the preliminary research stage of your electric transition will give you access to the information you need. A professional installer can obtain necessary permits, plan an electrical upgrade, customize your project to fit specific needs, and perform routine maintenance.

Cost

Investing in EV charging infrastructure is a financial decision. Carefully assessing projected usage, revenue models, and financing is a crucial part of the planning process.

You should also look into using incentives to offset the initial cost:

As a commercial property owner, you can qualify for a federal tax credit of 6%, up to $100,000 per unit if you’re in a low-income community or non-urban area.
There are more incentives at the state or city level. For instance, the city of South Portland in Maine is offering local businesses grants to cover the cost of installing up to six Level 2 chargers.
Some utility companies offer programs to support electrification. For instance, Michigan energy provider Consumers Energy offers rebates of up to $7,500 for multifamily units and $5,000 for hospitality and recreation businesses.

Find the right partner for your commercial EV charging project

How will the increasing adoption of EV charging impact commercial real estate? EV charging represents an opportunity to generate additional revenues for multifamily properties and other types of commercial buildings.

However, planning for an electrification project calls for working with the right partner and knowing you can trust their experience and knowledge. With over 260,000 successful installations, Qmerit can answer all your questions and guide you through the entire process, making your journey to electrification and an additional source of revenue generation seamless. Qmerit is Electrification Made Easy™ and we’re here to help!

Tom Bowen President, Qmerit Solutions and Commercial Electrification