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Charging Ahead: Why EV Infrastructure is the Next Big Investment for Commercial Real Estate

The electrification of transportation is accelerating at a rapid pace. Experts predict that electric vehicles will make up more than 50 percent of new passenger car sales in the United States by the year 2030, according to a recent market forecast report from BloombergNEF. This profound shift is powered by greater model availability, lower costs, extended range capabilities and growing climate change concerns. The EV revolution brings immense opportunities as well as challenges for commercial real estate owners and managers. Installing EV charging infrastructure is quickly becoming essential to remain competitive in attracting and retaining tenants in the coming years.


The Tenant Demand Challenge

The transition to EVs impacts commercial assets across sectors, from office towers, to shopping centers, warehouses, and multifamily housing. Tenants are increasingly considering easy access to EV charging an attractive perk and even an expectation. For white-collar office tenants, providing workplace charging shows commitment to employees who drive EVs. At industrial warehouses, charging enables fleets to transition to electric delivery vans and trucks. And for retailers, serving the growing legions of EV-driving customers requires deploying customer charging stations.

Lack of charging access at a property could negatively impact leasing velocity, rents, and tenant retention over time. Tenants across segments are demanding charging, and buildings without adequate infrastructure will prove less appealing. Installing some basic charging capacity is a relatively simple first step. But owners need a long-term infrastructure strategy to adequately serve tenants and remain competitive.


Charging Your Asset Ahead of the Curve

Forward-thinking owners are recognizing that investing in comprehensive EV infrastructure helps future-proof assets. Buildings equipped with ample charging capacity will likely attract premium rents and valuations in the coming decade.

Tenants view EV charging stations as a visible symbol of an owner's commitment to sustainability and meeting evolving transportation needs. Prominent charging locations also signal that a property is modern and tech-enabled.

Moreover, assets with robust charging networks are increasingly attractive acquisition and development opportunities for investors. Lack of infrastructure compromises a property's upside potential and ability to meet future tenant requirements.


Navigating the Charging Capacity Challenge

While basic Level 2 charging stations can be installed relatively easily, developing sufficient capacity to meet growing demand raises challenges. Constraints include upfront costs, electrical system upgrades, permitting issues, and selecting charging equipment.

To tackle these hurdles, commercial owners need a modular, phased approach. Conducting tenant surveys and electrical assessments is key to right-sizing initial infrastructure needs and minimizing upgrade costs. We recommend starting with an initial base of charging stations and then planning two to three capacity expansions to match adoption growth.

New smart charging technologies like dynamic load balancing help avoid costly panel upgrades. Cloud-based station networks provide usage monitoring and billing capabilities. Government incentives and utility rebates can further defray costs.


The Bottom Line

The EV transition brings disruption but also tremendous opportunity for commercial real estate. While installing charging infrastructure requires planning and investment, the benefits are manifold, from higher rents and valuations to meeting tenant needs and sustainability commitments. The writing is on the wall. EVs are the future, and buildings without charging risk accelerated obsolescence. As demand accelerates, now is the time for owners to charge ahead on infrastructure plans to future-proof their assets. Ready to electrify your commercial real estate portfolio? Contact GAIN at tad@GAINcre.com to discuss our portfolio of ESG-forward properties.

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