The Impact of Electric Vehicles on CRE

Electric vehicles are becoming more prevalent as Tesla and other car manufacturers continue to change the auto industry. Another industry this is impacting is the commercial real estate industry as owners of these vehicles need places to plug in, as opposed to stopping at gas stations to fuel up.

As more of the population adopts electric vehicles then they will expect for there to be an increase in options of where they can plug in —and not only options at their residence.

Once just concept vehicles, electric vehicles have become a reality with 2016 seeing the most units sold in the United States of all time. Last year over 150,000 electric vehicles were sold which was a 37% increase in sales from the prior year. While demand is on the rise it is important to note that approximately 50% of those sales were in the state of California. From a CRE perspective, electric vehicle ownership may not be growing as much in your market but you can look to the California market to see what developers are doing there to accommodate drivers.

When it comes to including charging stations for electric vehicle owners on your development there are two options. The first option is to purchase the equipment outright and manage it yourself. The other option is to partner with a company to provide the charging stations and maintain them. Whichever option you choose it is important to provide this amenity in spaces where it is in demand and the cost is justified.

Contributing to the adoption of these vehicles can also be in the hands of developers as the more charging station options there are, in terms of locations, the more likely individuals are to consider electric vehicles as an option for them. As an additional benefit to developers to attract tenants, especially in a retail development, most electric vehicles need at least thirty minutes of plug in time to get a decent charge for any type of significant driving distance meaning that the driver has time to kill which means they will most likely go into nearby retailers and eateries increasing foot traffic.

While providing charging stations can be an additional amenity to draw new tenants in or additional customers for your tenants, it can also come at a sacrifice. The footprint that the charging station takes up is essentially a parking spot so for every charging station that you choose to have you will give up that much parking for those who do not have electric vehicles. In some locations, this may not be an issue as parking can be plentiful but for more urban environments a few parking spots could make a huge impact on the number of overall spots offered.

Going green is now more to consider than just inside of the building and infrastructure as CRE could play a pivotal role in increasing the adoption of electric vehicles by providing charging stations. The demand for and rise of electric vehicles is definitely something that should be watched closely by the CRE industry.