New Division At CBRE Will Steer Landlords On Electric Vehicle Infrastructure

In a sign of the increase in electric vehicle adoption, the world’s largest commercial real estate services and investment firm, CBRE, announced a new global service line last week that will focus on the incorporation of electric vehicle charging infrastructure into commercial properties.

“Obviously, you're starting to see more charging stations in parking lots and [on] corporate campuses,” said Scott Howard, who was tapped to serve as the executive managing director of the newly minted service line. “But we are also looking beyond that.”

Members of CBRE’s EV division will advise property clients on EV charging strategy, identifying locations for charging sites, planning and installation of EV charging infrastructure and overall program management and maintenance.

Electric vehicles exceeded 6% of all sales for the first time in late 2022, according to the Department of Energy, and the number rose to 7% when hybrid vehicles are included. While the percentage may seem small, it is a large increase from 2010, when there were practically no electric vehicle sales. EVs didn’t exceed 1% of all sales until 2018. The pace of adoption is increasing. 

And those vehicles need somewhere to charge, which presents opportunity for real estate companies. 

“Our investors want to know what is the impact on their overall portfolio by putting in an EV infrastructure, whether it's for fleet vehicles, or whether it's for their workplace and their employees,” Howard said. 

Electrifying fleets of vehicles not only presents challenges as it relates to physical orientation on properties or infrastructure, but also ancillary implications such as how to effectively manage charging to keep energy costs at bay.

There is also opportunity in building standalone charging stations close to where people spend most of their time, something CBRE calls destination charging. 

Making chargers available for the general public can be a part of a business model for entities looking to lure foot traffic. For instance, retail shopping centers might see a bump in foot traffic by offering large charging stations with fast charging.

A fully electric vehicle can expect to receive a full charge in about 20 minutes to an hour if it hooks up to Digital Current Fast Charging Equipment, according to the Department of Transportation. By comparison, home chargers, what the industry calls Level 2 chargers, can take anywhere from four to 10 hours to do the same job. Using a Level 1 charger could take a couple of days. 

There are challenges for companies looking to implement EV charging at their properties. Those businesses will have to build out their electric grids and learn to avoid peak pricing.

“It can be challenging, because if you're trying to charge up during peak periods in places like California, you're going to pay a higher rate for that power,” said Chris Bahr, CBRE’s senior managing director of Global EV Solutions. “So, there are systems designed to perform load management or energy management that help you shift when you’re charging.”

Another challenge is staying current in a space that is innovating rapidly.

“We really have to look at this from a holistic short-, medium- and long-term range in order to make this a successful deployment of resources,” said Jim Hurless, CBRE's Real Estate EV Leader in Advisory & Transaction Services.

Howard agrees. 

“Future-proofing is inherent in any sort of office building and EV’s have quickly become another element which has to be future-proofed,” he said. “But when we’re talking to our customers, there is obviously a future need, but there is also a need right now.”

That need is particularly acute in states like California where adoption is particularly rapid.  

The Golden State accounted for 38% of all electric vehicles on the road in 2021, with more than half a million vehicles in the state, according to Electrek. The next closest state was Florida, with about 95,000 cars. 

“The highest EV adoption rates are typically along the two coastal areas,” Hurless said. Some of that is natural and some of that is due to the regulatory environment. California has taken steps to ban the sales of gas cars by 2035 and more states have followed.

So part of CBRE's approach to providing good guidance is helping to navigate these regional differences in adoption. 

“The vast majority of our clients have markets in different states or are multinational corporations,” Hurless said. “So we sit down with our clients and we actually talk to them about each of those state requirements.”

Part of that is not only describing potential punitive regulations but also opportunities created by government incentives. The Inflation Reduction Act, signed into law last August, contained a broad array of programs designed to incentivize the transformation to electrified infrastructure in office parks, on corporate campuses, in parking lots and in retail spaces.

“The Inflation Reduction Act has earmarked multibillions of dollars,” Bahr said. “So you have $3B or $4B coming into the marketplace to help to force this transition and companies and real estate investors are paying attention.”