As of June 2022, the NJBPU reported there were 80,583 electric vehicles registered in New Jersey, including both battery and plug-in hybrid models. A decade ago, the number was 265. And with the state’s ambitious goals set, along with evolving attitudes toward travel options from consumers and incentives to adopt them, that number should continue climbing.
In fact, the same day NAIOP New Jersey held a panel discussion exploring the impact of EVs on the state’s commercial real estate market, urgency surrounding that issue got a boost with Gov. Phil Murphy revealing six new steps to combat climate change in the Garden State. Among them: for all new car and light-duty truck sales to be zero-emission vehicles by 2035. Which means New Jersey will need a lot more chargers.
The discussion was led by Greenbaum Rowe Smith & Davis partner Robert Goldsmith, whose practice focuses on redevelopment, downtown and urban revitalization, transit-oriented development, project financing and incentives, sustainable building initiatives and public-private partnerships. Goldsmith also drives a plug-in hybrid, and at his firm’s office space, located at 75 Livingston Ave. in Roseland, he’s able to charge his car, which he candidly referred to as “a real convenience.” And that’s exactly what one of the property’s owners, Andrew Gottesman, CEO, Edison Investment Advisors and Gottesman Real Estate Partners, said was the intent when Goldsmith inquired as to why they installed charging stations during the property’s redevelopment.
“It seems to us that it’s sort of an amenity for office tenants these days,” he said during the event, likening them to fitness centers or cafeterias, though noting that EV chargers aren’t at quite the same level. But they’re “still up there in terms of something that tenants would like their employees to have access to.” And employees – like Goldsmith – like them. Of course, what employees like is an important factor in getting people out of the work-from-home routine.
“If it’s only a little bit of a help to also have people back to the office, you know, it’s worth it to us,” Gottesman said, adding that is also just seemed like the right thing to do. “The community is certainly going in the way of electric cars, and we wanted to be able to provide a service to help them: to own those and enjoy using them and feel comfortable using them,” he said.
According to the final participant in the discussion, Cathleen Lewis, manager of e-mobility programs for the New Jersey Board of Public Utilities, the number of EVs on the road has nearly doubled in the past two years. Compared with 2022’s more than 80,000 figure, in 2020 just 28, 869 EVs were registered in the state. The electric vehicle supply equipment – or chargers – where those vehicles get their power are categorized as Level 1, Level 2 or DC Fast Chargers. According to the state, there are currently 912 public charging stations in New Jersey.
L1 chargers are “your regular old plug,” Lewis said. It’ll take some time to charge, but, she added, it’s also really efficient. “We tend to refer to it as sipping that energy. And it’s also the least expensive way to do that. So, we tell folks if they’re building garages, if they’re building things, this is also really cheap because it’s just your standard outlet,” she said. L2’s, meanwhile, are a “really great opportunity for downtowns, for workplaces,” and what most people picture when they think about EV chargers.
When it comes to curing range anxiety – the fear of not being able to re-charge during longer trips – Fast Chargers will help to make a difference, allowing drivers to “fill up” in 20 to 30 minutes, versus an hour (L2) or overnight (L1) for a full charge. Good for high turnover, according to the NJBPU, station hardware costs can run from $7,000 to $50,000 per port and the chargers are best suited for municipal and private fleets in addition to public metro areas. Goals set by the Murphy administration call for adding “several hundred” of the fixtures by 2025, Lewis said.
Also aiding that effort is the federal National Electric Vehicle Infrastructure (NEVI) Formula Program.
For Lewis, targets and initiatives like those will accelerate the adoption of EVs. Under the NEVI requirements, EV chargers are encouraged to be no more than 50 miles apart along designated Alternative Fuel Corridors. In New Jersey, Lewis pointed out that the state requirement is for Fast Chargers to appear every 25 miles. In addition to offering even more reassurance to worried drivers, that also presents a bigger opportunity for certain developers or property owners.
“[T]here are some opportunities from a commercial side for people to think about siting them there, but you also need to remember that they are going to be public,” Lewis advised. “So, they need to be listed on those public apps. You are going to have people coming in and out. … [Y]ou want to make sure they’re in well-lit places.”
So, if you have a commercial hub – say “a shopping center for instance, that may be something that you’re more interested in because people will go to those shops then as well,” she added.
To help proliferate the infrastructure that is necessary to support the influx and transition to EVs, the state has a handful of programs offering incentives, including:
This program seeks to entice owners and operators of MUDs to include EV chargers for their residents and guests by offering incentives to aid the purchase and installation of eligible equipment. Lewis said it is applicable to properties that have five or more residential units and dedicated off-street parking. According to the NJBPU, so far, the program has awarded $1.06 million and 223 chargers.
Under the state’s EV Act, 15% of all multifamily residential properties are required to be equipped with EVSE – through a combination of L1 EVSE, L2 EVSE, or charger ready parking spaces – by Dec. 31, 2025.
Most living spaces with charging capabilities are currently single-family homes, so the MUD incentive can also serve to expand the places EVs are found. According to a September 2022 report from NJBPU, nearly 36% of all residents live in these kinds of multi-unit dwellings. Pointing to the fact that residents of MUDs may have lower income than homeowners, the report also said this type of proliferation could help to create equity in who has an EV.
Additionally, as transit-oriented developments continue to crop up along the state’s rail lines, chargers can also help boost adoption of EVs by ride-hailing drivers, giving them space to charge up in downtown locations where they may receive and deliver passengers, or even live themselves.
Available awards include: $4,000 toward the purchase of a dual-port, networked L2 EV charging station and $6,000 toward the purchase of a L2 EV charging station for an MUD located in an Overburdened Municipality. Applications are due June 2, 2023.
According to Lewis, this grant aims to get L2 charges installed at places like “downtowns and parks and historic sites,” in addition to locations ranging from boardwalks, unique attractions and overnight lodging establishments. Applicants can submit for up to six L2 chargers and two DC Fast Chargers. Available awards include: up to $5,000 for an eligible L2 charger, up to the cost of the charger; and up to $50,000 for a Direct Current Fast Charger, up to the cost of the charger.
This program is for government entities, but Lewis suggested that if you “have a partnership with a municipality on a local parking deck or a local building, that may be something that you want to explore.” Applications are due June 2, 2023.
Certain EV charging stations that receive electric utility service from Atlantic City Electric Co., Public Service Electric and Gas Co. or Jersey Central Power and Light, may be eligible for additional incentives directly from the utility, which could add up to covering 90% of the combined charger purchase and installation costs. This effort is “make-ready,” Lewis explained, which covers everything up to the charger, or stub. “So essentially in New Jersey, the utilities will pay for the make ready and all of the state incentives pay for the chargers,” she said.
“We do require that at least 10% of the total product project cost is covered by private industries. So, the landlord, the developer, whoever it is. And that’s to make sure that folks have skin in the game cause it’s going to cost something to own and operate them. … So we’ll cover up to 90% of that total.
Authorized using funds from the Regional Greenhouse Gas Initiative, the MHD EV Program is for larger trucks, which Lewis pointed out “can be really great for warehouse developments, those sorts of things that may be looking to expand their business model and provide some charging hubs for small businesses that have gone electric.”
That kind of synergy allows smaller businesses to make the switch to electric without having to install their own charger or fast charger onsite. Designed for box trucks, and bigger, the vehicles will take a couple of hours to charge (for comparison, a sedan might take about 20 minutes on one of these, according to Lewis) due to the size of their batteries. “And so this can be a really great business opportunity for folks who have that warehouse space and want to have that extra income. And have folks who may be able to, by schedule or by subscription, come in and charge their vehicles,” she said.
Available awards include: $225,000 toward the purchase and installation of 150 kW or greater dual-port, networked DC Fast Charger and make ready, with at least $25,000 per charger suggested for use in potential distribution system upgrade funding. For this Community Charging initiative all chargers must be publicly available. And, $175,000 toward the purchase and installation of 150 kW or greater dualport, networked DC Fast Charger and make ready, with at least $25,000 per charger suggested for use in potential distribution system upgrade funding for Private Fleet Charging.
This New Jersey Department of Environmental Protection program is eligible to workplaces, public places, MUDs, corridors, communities or for eMobility (those used in association with ride-hailing, ride-sharing, shared mobility or other such like services) projects. Applicants can be reimbursed for a percentage of certain costs, up to a maximum of $750 per L1 charging port and $4,000 per L2 charging port.
And whether or not you think EVs are the way of the future, the space is something you should pay attention to because as Lewis pointed out, there are applicable requirements on the books for new construction in the state. Separate from public considerations, she explained, “We have our right to charge law, which means that if you own a condo association, any of those pieces, if you have an individual resident who wants to put charging in their garage or on their parking space, that cannot be prohibited.”
All new multifamily dwellings, commercial parking lots and garages also have EV parking requirements. Stemming from a statewide model ordinance that was adopted by all of New Jersey’s 564 municipalities, that rule defined chargers as a permitted accessory use, making it easier for their installation because it “means that you don’t have any of that sort of red tape that came with charges in the past,” Lewis said. She pointed out that when you’re building new, you just need to make sure you’re building “make ready.”
“So you don’t have to put a charger on it today,” Lewis said, “but you need to have invested in the wiring that goes into that.” This is where the utility programs, above, can help. “And then there are phase in of requirements of when those chargers have to be up. And those requirements change based on the number of available parking spaces you have,” she continued.
But, the requirements aren’t the only reason to consider including EVSE.
According to Lewis, most EV drivers charge at home 80% of the time. But, “there’s also a huge swath of people that will not necessarily be able to charge every day.” People who live in multi-unit dwellings or in urban areas “where they don’t necessarily have a garage to come into every day,” Lewis suggested. And that’s where the MUD, public and workplace chargers come in.
Like Gottesman, Lewis suggested that workplace charging is a great incentive to get workers into the office, in addition to offering access to people who may not have it every day at home.
“And it’s going to be a huge piece to that comprehensive ecosystem that we talk about that pulls all of those pieces together. Not one of those is a single solution,” she said.
For Gottesman, the value is clear.
“I think having EV charging stations is part of the kind of initia of being a Class A building,” he said, pointing out that these days, it’s usually the decisionmakers who pull into work in an EV — “people who are making decisions on lease signing and where to site their company and those kinds of things. And to pull you into that level of the high-quality tenants that we wanted, it helps to form a match when you show that you’re interested in charging.”
And thinking in those terms can help alleviate concerns about costs or provide a fresh perspective. “I think you have to just evaluate the cost of doing it as a portion of your total investment in a property and decide whether having the amenity, and what you think that is worth to enhance leasing for the property and better tenants and quicker leasing and higher rental rates is worth it to install the charges sort of part of the overall calculus of making an investment in a commercial property,” Gottesman said, adding that for his company it’s not been, “in any case,” something where the costs outweighed those benefits in the context of a Class A suburban or Midtown Manhattan office building.b