Should Commercial Property Owners Invest in Electric Vehicle Charging Stations?

Today’s guests are Jeff Patterson and Matthew Bell.

 

Show summary: 

In this episode of the How to Scale Commercial Real Estate Show, guests Jeff Patterson and Matthew Bell discuss the opportunities presented by electric vehicle charging stations for commercial property owners. They highlight the benefits of having charging stations, such as increased customer stay and revenue generation. They also discuss the potential costs and incentives of installing these stations, emphasizing the importance of taking advantage of current incentives. The guests also explore the marketing strategies for charging stations and the potential for partnering with the federal government in developing charging infrastructure.

 

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Opportunity for Commercial Property Owners (00:00:00)

Introduction of Matthew Bell (00:01:04)

Monetization and Regulations of EV Charging Stations (00:06:11)

The payback period and potential costs (00:09:51)

Incentives for EV charging stations (00:11:17)

Solar and EV charging possibilities (00:16:23)

The Efficiency of Solar Power for EV Charging Stations (00:19:12)

Opportunities for Commercial Property Owners (00:19:47)

Marketing EV Charging Stations (00:21:51)

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Connect with Jeff and Matthew: 

Web: https://www.phoenixparkingsolutions.com/

 

Connect with Sam:

I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.  

 

Facebook: https://www.facebook.com/HowtoscaleCRE/

LinkedIn: https://www.linkedin.com/in/samwilsonhowtoscalecre/

Email me → [email protected]

 

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Want to read the full show notes of the episode? Check it out below:

Jeff Patterson (00:00:00) - There's a reason why, um, companies like Starbucks and, uh, waffle House, which I put in one of my recent LinkedIn. There's an article out there where they're looking at it because they want people to stop and stay longer at their business while their car charges, and they've ran the calculations on how they're going to make more money by people being longer inside their stores. So it's not just about the investment in getting the return of the chargers outside. It's about the additional money you could make inside your business. And depending on what your business model is, um, you know, that could turn out really favorable for you.

 

Intro (00:00:36) - Welcome to the how to Scale Commercial real estate show. Whether you are an active or passive investor, we'll teach you how to scale your real estate investing business into something big.

 

Sam Wilson (00:00:48) - For those of you that don't know, Jeff Patterson was on the show on November 6th, you should go back and check out that episode. That's episode number 866. Today we're here doing round two of the show with Jeff and also with Matthew Bell.

 

Sam Wilson (00:01:04) - Matthew, welcome to the show. If you don't mind, you know, again, if you want to hear, just buy. I'll go back and hear that one. But, uh, we're introducing Matthew here to the show as well. We're going to do a two person or three person episode here today. So, Matthew, can you tell us, uh, just quickly what your background is? Actually what I normally ask Matthew, and I can't help but do it. I'm sorry. In 90s or less. You got to tell me. Matthew, where do you start? Where are you now? And how'd you get there?

 

Matthew Bell (00:01:26) - Sure. Absolutely. Thank you, and thanks for having me on today. Um, so I'm our vice president of business development at Pyramid Network Services. So, uh, I started in telecom right out of school. Uh, worked on the first major build out for sprint. From there, I moved I became outside counsel for Verizon for a number of years. Uh, there I moved to in-house, um, corporate counsel for a large fiber company.

 

Matthew Bell (00:01:50) - Uh, eventually that sold, went back to sprint, uh, for a period of time, uh, and ran national build out there for Network Vision, where we went and, uh, updated 27,000 sites in about three years. Uh, and then when that ended, uh, wanted to do something a little bit different. And that's how I ended up at pyramid.

 

Sam Wilson (00:02:10) - That's awesome. Cool. I know the topic that we are covering here today, for those of you who are interested in what episode or the, uh, you know, round two of this, of this episode is we're talking about electric vehicle charging stations. So maybe, Jeff, you can kick us off and tell us just what that means, what the opportunities are, and kind of how you guys tie into that right now.

 

Jeff Patterson (00:02:32) - Sure. Thanks. Good to see you again, Sam. Um, so everybody's hearing all the the sound out there on the street, and it's in this article on this social media platform about EV car.

 

Jeff Patterson (00:02:45) - You know, uh, they're making this new one, or, uh, California is mandating no combustion vehicles after 20, 35 to be sold. Um, there's a lot to be said, but there's a lot of consumer questions going on. And I know for a lot of investors and commercial property owners, what do I do? Who do I even talk to about this? And that's where Phoenix kind of came in the market of, well, we're talking about cars talking about charging a vehicles, which typically is going to happen in a parking lot. So parking companies seems to be a logical place that you'd reach out to. Um, now for us, we decided to partner with pyramid and s, uh, because of their full turnkey agnostic, uh, services. So, um, instead of me partnering with, just for instance, ChargePoint, which a lot of people, you know, know anything about EV chargers I've seen out there. Nothing wrong with them. Um, but I would be dedicated to one single charge company with pyramid and s.

 

Jeff Patterson (00:03:46) - Um, we are able to work with multiple, uh, charging station companies to offer what's best for anyone out there. And it doesn't just have to be someone who's looking for my particular operation services. It could be a strip mall. You could be a a waffle House, a huddle House, uh, uh, a Walmart, um, the Starbucks, you know, we do everything from start to finish and, um, you know, really are there to help everyone along the process because most people don't know. Where do you start?

 

Sam Wilson (00:04:17) - Absolutely. No. I mean, yeah, if you asked me that today, I'd be like, I have no idea. So you you guys get to plug in and work basically with everybody, you know, everybody from even I would imagine, multifamily property owners. I mean, any property type is really your target avatar.

 

Jeff Patterson (00:04:33) - Correct.

 

Sam Wilson (00:04:34) - That is wild. So what's what's the opportunity for a building owner, say, somebody like me, like, how do we how do we how do we, no pun intended, plug in with this.

 

Sam Wilson (00:04:44) - And I mean, is there monetization opportunities? Is there like why would we even provide this other than just a nice thing to have?

 

Jeff Patterson (00:04:55) - Well, it depends on what type of property you do have. You know, you mentioned multifamily, for example. Well, what type of, um, multifamily project do you have? If you're in our city and you're in places where EV charging is growing? If I own an EV car, I'm not going to come live at your apartment complex if I don't have a way to charge my car. So this becomes very important for you to be able to, um, not lose potential, uh, residents. As you know, you're growing and maintaining your business profile. Uh, similar things would be, um, think about, like, a Whole Foods or. Uh, Matt and then were recently educating me on school buses. Uh, a lot of school buses are going, uh, electric and, uh, pyramid has a platform there. They work with a company, and they installed the chargers for the entire county for the school system to take the school buses.

 

Jeff Patterson (00:05:49) - Electric. Uh, it really depends on where you're at, but there is monetisation options. For instance, no one really charges for free. Um, you know, you plug up, you pay for the amount of time you use and, um, you know, based upon your initial capital investment and what you're charging for therm, uh, you know, like any other investment, there's a break even point and then profitability afterwards.

 

Sam Wilson (00:06:11) - Is there on on that monetization aspect, are there regulations around how much you can mark up that electricity? I know utilities are pretty heavily regulated. I know if you produce and of course, you know, it's the fox guarding the henhouse, but if you produce electricity, you know, via solar, you're going to be limited via contract rates. And as to what that gets sold back to the grid. So conversely, are there limits as to what you can charge at an EV charging station to the end user?

 

Jeff Patterson (00:06:41) - I'm going to turn this one on to Matt.

 

Matthew Bell (00:06:42) - Yeah.

 

Matthew Bell (00:06:43) - There currently are not. Um, obviously, if you're charging a huge amount, there'll be an issue there, but it really comes down to the speed that you're charging at, and I think that's why it's not regulated. So there's obviously a larger upfront cost to install a level three EV fast charger. And the EV fast charger can, uh, charge your car in approximately 15 to 20 minutes. Uh, whereas like a level two charger is more set up, uh, to do it over a few hours. Uh, so again, thinking about the different kind of, uh, location that you're at, whether you're a commercial property, uh, a hotel or something like that, people are going to be there for a longer period of time. Uh, the two hour charge of the EV works a little bit better. Uh, a level three charger is something that, you know, you'd want by, uh, a highway or at a McDonald's or something like that. Uh, people stopping by trying to fill up, grabbing something quick, and then moving on.

 

Matthew Bell (00:07:50) - So I was just going to add in to, you know, I think a piece of this is the question you were asking before was, you know, do we want to be a part of this? Why would we be a part of this? And I think those are great questions to ask. But another another thought about this is that, you know, EV is here to stay. And I think we're seeing it just kind of slowly building. But it's it's not a fad. It's not going away. Um, the last couple of years there's been like between 1 and 2 million, uh, cars produced, EV cars produced, uh, but they're projecting in 2029, uh, which is, is five years from that will be over 6.5 million. Uh, so the demand for this is, is going to be huge. Um, and we've seen just in 2021 and 2022, some of the largest investments from the US automakers as well, uh, they put in over $70 billion to gear up for this.

 

Matthew Bell (00:08:44) - And the cars are are very different. Um, they will recognize some benefits from it as well. And that, you know, uh, an internal combustion engine has over 2000 parts that move inside of it, whereas an EV only has 20, uh, the components in a in an Ice car, uh, an internal combustion engine car, there's over 30,000 components. There's half as many, uh, in an EV car. So beyond just the, uh, benefits, the environmental benefits, uh, that people are talking about, there's a lot to be gained, uh, for the, the automakers to as this process matures. And I think it's going to be something that that people are going to demand and, and require when they go different locations.

 

Sam Wilson (00:09:30) - Right. And I would imagine that the speed of adoption, uh, early on for people placing charging stations is probably like the early bird gets the worm, in a sense, in that because it's not widely spread. It's something that if you if you put these in now, you obviously can can probably recoup your investment much sooner, say, than somebody ten years from now.

 

Sam Wilson (00:09:51) - It's like, you know, scratching their head, going, oh, man, you know what? We should probably put an EV charging station in, you know, because I don't know I don't know what the in Jeff, you mentioned this what the payback period is like. How long does this take. And maybe you guys can speak to what that, you know, potential costs are. And I know, like you mentioned there, uh, Matt, that that, you know, level one, two, three, I'd imagine there's probably different costs associated with that. What are, you know, talking about government and intervention or involvement, rather, what are the incentives, uh, are there incentives available for this sort of thing? I mean, maybe you guys can just give us some insight on that, because this is obviously a world I know nothing about.

 

Jeff Patterson (00:10:29) - Definitely. I wanted to piggyback there real quick on Matt. Uh, last comments, we're just talking about how the automakers are into it.

 

Jeff Patterson (00:10:36) - Well, you also have the big guys like BP, where they are now leveraging and investing their money into lithium and creating their own chargers. So it's not just the automakers. Um, you see it all around in all the industries where they are leveraging and shifting direction, which, um, you know, ultimately means, as Matt said, it's not going anywhere. Currently, there are lots of incentives. That's part of what Phoenix and Pyramid working together, uh, help throughout our turnkey process is, you know, when we get to that, uh, that stage with whomever we're working with, we will help work with you on those incentives.

 

Sam Wilson (00:11:17) - What? What is this? Can you give us a breakdown of of like, maybe payback period. And and I know obviously every installation is different. Uh, but you know, what? Should somebody be looking at from a payback period? And then also from a just, you know, cost of, uh, cost of implementing a system like this.

 

Matthew Bell (00:11:37) - Yeah, I'll jump in on that.

 

Matthew Bell (00:11:38) - So, you know, like Jeff was saying, um, we manage a database, a national database that tracks all these incentives. Uh, and, and this part sounds kind of salesy, but the time really is now, um, to to grab Ahold of these, there are tax incentives, there are utility incentives. There are state incentives that are municipal incentives. There are national government incentives. Um, there's a lot of money out there, and it's coming from a lot of different sources. Uh, and we track all of that. So, you know, even if you're thinking about wanting to do this, um, you know, I would say reach out to Jeff, reach out to myself, um, and just let us run the incentives and see what's out there, what might be a possibility for you because, um, eventually, like, we always see, the money goes away, right? The the the system starts to mature. You get more of these locations out there. Uh, you don't need these incentives any longer.

 

Matthew Bell (00:12:37) - And so, you know, I was telling somebody this the other day, but a few years ago, somebody came to my house and said, hey, you want to put a new roof on? And I said, yeah, I don't think I'm really looking to do that right now. I said, do you mind if I go up there and take a look at it? I said, sure, and he spent a few minutes up there and he said, yeah, I think you're probably gonna need one in the next year or so. And, uh, there's, there's some hail damage up here. Probably get a good portion of this covered. I'm a lot more interested in a new roof at this point. So, uh, you know, I think that this.

 

Sam Wilson (00:13:07) - Is.

 

Matthew Bell (00:13:09) - It's kind of akin to what we're talking about here, but there, there really are, depending upon what state you're in, and we can look it up by the exact address and location, uh, to tell you what's available now or what may be available, uh, in the coming months.

 

Matthew Bell (00:13:23) - Uh, but that that's one of the factors that comes in. So, um, to get back to your a question about the payoff period, you know, it really depends a lot on, um, obviously the upfront expense and, and that can be driven by, you know, a level two charger. You're talking kind of in the tens of thousands of dollars, uh, a level three you're probably closer to. You know, 80 to 100,000. Um, and that just because of the power upgrades that are going to be required, uh, and the equipment that's going to be required, that's a level two is, you know, much more like a trickle charger. And, and people can usually support that with the infrastructure that they currently have. But uh, a level three a lot of times requires a new service. That said, obviously people enjoy being able to charge their car in 15 minutes versus, you know, two and a half or three hours. So what you can charge for that is significantly more.

 

Matthew Bell (00:14:25) - Um, so I think you have to find what fits for you. Um, but we have seen, uh, payback periods in just a few years. Um, for, for both level two and level three, dependent upon customer traffic and pieces like that.

 

Sam Wilson (00:14:42) - Right. So here here's I'm going to give you a little bit of a potential case study. We've got a facility in a small town in Tennessee. And the, uh we're putting solar in. Now, I will say that solar in general, from our perspective, doesn't make sense. Like the payback periods, like 25 or 30 years. I mean, and from a, you know, especially when bringing in investors, most investors don't get too thrilled with a 25 year payback. We break even in 25 years. It just doesn't make sense. But based on where this building is located, the zones it's in and, you know, some some arbitrarily grown or derived government map, it's a 90. We have a 90%, um, between tax credits and everything else.

 

Sam Wilson (00:15:25) - It's a 90% of that solar installation is covered. So our payback period is actually one year, which is you know, that's fantastic. Fantastic. Right. And so, you know, a company like you came to me and said, hey, man, you know, we should do solar on your building. And they said, well, here's how we're going to do it. And then they guided us through the process and they had their grant writer write the grants and blah, blah, blah. And down the road we go. And it was I mean, it was a brainless move, like, of course we'll do that. Is that same kind of thing available here in the EV charging space?

 

Matthew Bell (00:15:54) - Yeah, we actually submitted for incentives, um, at a New York property the other day for just that. And we, we believe it'll be between 80 and 90%, uh, of that that's covered, um, again, but not to set that expectation for everywhere. New York is pretty progressive and and a lot of money available there.

 

Matthew Bell (00:16:13) - California same way. Um, and, and other states are following suit um behind that. But but that's out there. Exactly. For example.

 

Sam Wilson (00:16:23) - Right. Which is, which is, which is really weird because I kid you not, ten miles down the road, another facility would only qualify for 50 because we looked into it as well. And it was like, well, okay. Now once again, solar no longer makes sense because again, it's a 12.5 year payback period. So scrap that one. But we're going to do the 90%, you know, one with uh with no questions. So that that's really great to think about. And on that question, you know, follow along with that is let's talk about solar to EV charger possibilities. Anything like that exist out there.

 

Matthew Bell (00:16:56) - There are. And I apologize, Jeff, I want to give you a chance to jump in here, too. But, um. Yeah. You're good. Um, there are, uh, solar opportunities out there around that.

 

Matthew Bell (00:17:06) - Uh, what we're seeing a lot of those is, uh, battery systems as well. Um, and that's one of the pieces that we try and do when we come in. Uh, we do a lot of value engineering. And that's not only picking the location. If you have a parking garage and you say, hey, we want to put it in in a corner, putting it in the east corner versus the west corner might be a $100,000 difference just because of power runs and, uh, and working across a parking lot or something like that. So those are all pieces, um, that, that we look at inside of that. But, um, the battery backup systems can sometimes help pull in power, and you don't have so much of a demand on the grid at that point. Uh, and you may not need the same level of service upgrade. So we have seen some solar, uh, and we've done a lot of solar projects. So that's certainly something to look at. But, uh, we're looking and utilizing batteries a lot as well.

 

Sam Wilson (00:18:03) - Right. That would make sense because and at this particular installation, because that was one of the things we looked at. And this was a commercial facility. We're just doing direct consumption. When the sun produces, we use the energy. We're not putting batteries at this facility because it the cost of doing so was like an a double or triple it. And it again, it didn't make sense. But I would imagine on the solar side of things, if you're able to set it up solar to where it goes to battery, and then when someone because you know somebody's not charging, you're then recharging the local storage that then somebody can plug into and charge their own batteries and, you know, off they go.

 

Matthew Bell (00:18:36) - Yeah, there's a need on the market right now. Um, that actually is that it is a DC fast charger. Uh, but it it has large batteries inside of it, and so, um, they're still working out a few pieces with it, but you can actually pull, uh, small amounts of power from and you could institute some solar piece to that as well, but you're pulling in smaller amounts of power over a period of time, and then you're offering the DC fast charging speed without having to do that major, uh, electrical upgrade.

 

Matthew Bell (00:19:10) - Right?

 

Sam Wilson (00:19:11) - Right. Yeah. And I can imagine.

 

Sam Wilson (00:19:12) - That that that's not, um, I'm not going to call it sustainable, but that is not it's not going to be an efficient way to do it strictly off of solar. So I'd imagine there have to be a switching, you know, some, some, you know, with being tied to the grid. Plus, you know, using solar as a as a is a is an augment to that, uh, you know, to that grid tie in. So what, uh, what thoughts on this do you do you have Jeff, I know we haven't heard much from you, so I kind of want to.

 

Sam Wilson (00:19:36) - Hear from.

 

Sam Wilson (00:19:37) - You, uh, a little bit more insight on market, on what people should be doing. Uh, anything, anything on that front. And, you know, if you want to share some other stuff you're having asked about, I'd love, love to hear from that as well.

 

Jeff Patterson (00:19:47) - Of course. Thanks. I think it's something everyone should be looking into.

 

Jeff Patterson (00:19:51) - So, you know, we've clearly made the point today that from an investment standpoint, um, a lot of people are shifting that way from car dealers to whether you want to buy an EV charging car or not, unless you might change where you live. Some states are regulating it. So eventually you're going to own a EV car. Um, you know, if you're just an investor, it's an opportunity for you to possibly make some money in the long run. If you are a property manager, you know, is it best for your property? Uh, if you're a property owner, are you talking to your property managers? We look into these things. Is it going to help draw more people to our business to stay longer? There's a reason why, um, companies like Starbucks and, uh, waffle House, which I put in one of my recent LinkedIn. There's an article out there where they're looking at it because they want people to stop and stay longer at their business while their car charges, and they've ran the calculations on how they're going to make more money by people being longer inside their stores.

 

Jeff Patterson (00:20:48) - So it's not just about the investment and getting the return of the chargers outside. It's about the additional money you could make inside your business. And depending on what your business model is, um, you know, that could turn out really favorable for you, right?

 

Sam Wilson (00:21:03) - Right now, that's exactly right. We we are long. One of the things we invest in is, uh, laundry facilities. And so people come, they do their laundry, and I'm thinking I've got several locations of Meccan actually going to shoot you in this podcast is over because I'm like, I wonder those, uh, what the incentives could look like at those facilities and if it would make sense when people come in, you know, they're there for an hour. Uh, and we do see electric cars. So it's, uh, on that. What what is the, um, what's the marketing methodology behind this? What should somebody be thinking about on that front? Is it. And I've never looked I've never even so much has done a cursory review of like, where's an electric charging station? Because I have no need for it.

 

Sam Wilson (00:21:41) - But is it all just on Google Maps, like you say, EV charging station? Like, how does somebody market this to the public to even let them know that they have the station available?

 

Jeff Patterson (00:21:51) - So yes, there's Google Maps Apple map you can log on right now and type in, you know, a blink charge or a charge point. And people who have taken the time have got those charging stations added, but that's not where all of them are. Um, there's actually a national database. Anybody who owns an EV car, um, has access to and can see when they want to charge your vehicle, it'll tell you where the nearest charger is at. Um, so that way you can go and charge up. It's, uh, a federal, um, database that is out there. So every EV charger that's put in gets put in there, and that way everyone can see it. And you can click to map your trip to, uh, Ohio or to Florida, to the beach, and it'll show you which route you need to go to, hit the Chargers and, uh, make sure you can, you know, get there and back and the amount of time you want to.

 

Sam Wilson (00:22:41) - No, that makes that makes a heck of a lot of sense. Yeah. Because that I mean, you need to know where those are. So you can you can plug in. All right. So I've got one more question on this. And this was something somebody approached me with maybe two years ago. They said, hey, you know, we've got this incredible opportunity to I'm going to call it partner, but to work with the federal government on developing charging stations across our highway systems. He would talk to me about that. If you know anything at all about what that looks like, because they're saying, hey, you know, we can go, we can go across call it Tennessee, we can be on I-40. It'll be every 50 miles, and we'll have charging stations, we'll have advertising opportunities, we'll have lot a lot of blah, blah, blah. I don't know all the things because it's been three years and I've slept since then. But you have any insight on what that looks like?

 

Jeff Patterson (00:23:27) - I think Matt would be the most knowledgeable here on that since, you know, he's the day more day to day.

 

Jeff Patterson (00:23:32) - So I'll let you take the wheel there.

 

Matthew Bell (00:23:34) - Okay. Um, yes. And we're involved in some of those. Uh, there are, um, three states that have been, uh, released recently that I know about. Um, and we're kind of in final talks to, to work through that, but, um, but yeah, they're setting those up. Uh, the goal is to be able to get people from point A to point B, uh, utilizing these chargers. And there's, there's huge gaps out there. And that's where a lot of this money's going. And, and that funding is supporting those, um, those initiatives to make sure that, that people can go where they need to go. Um, and, and the second piece to that, uh, and that's something that we, we do spend a lot of time on is, uh, making sure that the chargers are up. So, um, so to qualify for that government money, uh, you're, you have to have a 97% uptime.

 

Matthew Bell (00:24:34) - Um, and currently we don't only not have enough chargers, but, uh, at any given time, about 30% of the Chargers nationally are down. Uh, and there's there's a real issue around that. Uh, and so, you know, part of what we provide to is, is a long term service and training and, and things like that. There's currently um, I don't think people use the phone book anymore. But if you did, if you open that up, you're not going to find your EV charging repairman, uh, listed in there. So, uh, it is new. And so, you know, we do want to create long term relationships with customers, uh, and clients, whether you're just doing one at, at your laundromat or you're doing one all across the country. Um, we want to do the training so that you guys can do some of the basic service. And then obviously it would support on top of that, um, if there was something else that you needed.

 

Sam Wilson (00:25:33) - Right.

 

Sam Wilson (00:25:34) - I love it. Absolutely love it. Matthew and Jeff, what is the best way to get Ahold of you guys? If our listeners want to learn more about what you guys are doing and talk about EV chargers at their facilities.

 

Jeff Patterson (00:25:47) - Uh, for us, you can go to our website. Phoenix parking solutions. Com we have a special EV solutions tab. Click on that. It'll give you, uh, more about what we talked today and a direct access point to get in touch with us.

 

Sam Wilson (00:26:00) - Fantastic. We'll make sure to include that there in the show notes. Gentlemen, thank you for coming on today. I certainly appreciate it. And I learned a ton from you. Thanks. Thanks, Sam. Hey, thanks for listening to the How to Scale Commercial Real Estate podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen. If you can do that for us, that would be a fantastic help to the show.

 

Sam Wilson (00:26:25) - It helps us both attract new listeners as well as rank higher on those directories. So appreciate you listening. Thanks so much and hope to catch you on the next episode.