The New Era of Multifamily Living: Integrating Energy and Digital Solutions

Introduction to Multifamily EV Infrastructure

Drew: Welcome back to the Peak Property Performance Podcast. I am Drew Hall and here with me, I have Bill Douglas. Welcome, Bill.

Bill: Thanks, Drew. Great to see you. Today's guest is David Aronson. David, welcome. I'll read your intro in a second, but I wanted to say welcome first. Glad you could join us.

David Aronson: Thank you for having me. Nice to see everybody. Everybody, David sits at the intersection of real estate, energy, and technology, helping multifamily owners capture new value streams through EV charging infrastructure, electric vehicles. He's with Refuel Electric Vehicle Solutions. We call it REVS. He's focused on turning what many see as a cost center into a competitive advantage. So, David, again, welcome to the show.

David Aronson: Thank you. Welcome.

EV Charging: Amenity or Revenue Stream?

Drew: All right, David, let's start here. Why is now the moment for multifamily to take EV infrastructure seriously?

David Aronson: Well, I think it starts with a couple of things. Number one, our society is transitioning to electric vehicles. And I used to say not because we want to necessarily, but that's all the manufacturers are going to be making. Over the last six months, it's changed a little bit clearly with the administration that we have. But at the end of the day, if you objectively look at electric vehicles, they are not more expensive than what you get with a gas car. They're actually less expensive. They're less expensive to operate. They're less expensive to maintain. They provide the convenience of being able to refuel and not go to a gas station. And quite frankly, they drive better. So it's a better product. And as more and more people buy EVs or lease EVs or drive EVs, the word will get out that this is a better product. That's why it should continue to be adopted. And I'm a firm believer that everybody is going to be driving an EV at some point in time, probably not in my lifetime. But what you have right now is it's very early in the ballgame. And a third of the residents in this country, a third of the population, lives in rental properties. And those rental properties need to have an ability to refuel their residents' electric vehicles, lest they won't be able to remain competitive in the marketplace.

David Aronson: So here's what we see go on. Somebody wants to rent an apartment. They go to, they look at a certain area. They know where they want to be. They're probably looking on a website. And if they own an electric vehicle and that property doesn't have an EV charging station, they're not even going to go look at that property. If they live in an apartment and they want to buy an electric vehicle, we're finding many people are holding off because their apartment property doesn't offer EV charging.

Drew: Now, gotcha. Yeah. So how are owners doing that? Are they treating the EV charging more as an amenity or are they starting to see it as a revenue stream or what? How is that shaping up?

David Aronson: It's right now firmly in place as an amenity. OK, but if you look at the new properties that are being built, most of them, not all of them, but but I'm going to say over 90 percent of them are installing some level of infrastructure to accommodate future EV charging stations. It's much less expensive to do it when you're building it, when the property's already been built. And it's a lot more less restrictive to do what you want to do when you're building it versus when you go to an existing property because they already have what they have and you got to deal with what they've got. So we believe that EV charging is necessary infrastructure.

Bill: That's good that you brought that up because that was actually the next shift, David. It's like you're reading the script. At Big Property Performance, we always come back to own the digital infrastructure and you own the leverage, right? Because, well, not only are you providing services, but you're getting the data. So how does that principle apply solely to EV charging? Take that a bit further.

David Aronson: Well, one thing I was going to add is if you think about the new properties that are being built today, what's their lifecycle? How long do you think they'll continue to be apartments? 40, 50 years? That's usually the plan. At least 30. Yeah. So you think about 40 to 50 years, I believe that that apartment property will have more electric vehicles parked at their property over the useful life of that property. Then there will be gas cars.

Drew: Interesting.

David Aronson: Yeah. Keep in mind, we're in 2025. By 2040, most automobile manufacturers have said that they're not going to make anything but electric. OK, so that's 15 years. So 35 years, that will phase out all the gas cars and it'll be all electric. So think about that.

Ownership and Control of Digital Infrastructure

Bill: Yeah. So what are the pitfalls when a commercial real estate owner lets a third party network or utility or some other company control the charging system, control the digital infrastructure relevant to that, and not just the data flow, but the electric flow as well? Where's your position on that? How do you believe they should handle it?

David Aronson: Well, I think every owner is different. OK, some owners want to own everything and some owners are happy renting it basically or having somebody else deal with it. EV charging is kind of in between right now. I liken it to washers and dryers. OK, they used to build apartment complexes that had these laundromats. Now I was in one of those in New York.

Drew: Right.

David Aronson: Yeah, exactly. And so that laundromat probably is not owned by the property. It's a third party who comes in and there's been very large businesses built off of, you know, by people who own and operate washers and dryers who will lease that space from that apartment property to put the washers and dryers in to serve their residents who want to wash their clothes where they live.

Bill: So you're saying it's a fiscal decision, makes no difference. Otherwise, it's just you want to buy it or you want to rent it?

David Aronson: Well, most people either way, they're not going to want to operate it. Right.

Bill: Well, that's exactly right. That's exactly right. But the other thing driving decisions is many clients, especially the institutionally owned clients, believe that you need to have EV charging stations. But the budgets of these apartment properties are so tight with increases in insurance and property taxes and utility inflation driving up residents costs that they don't have any money to put them in.

David Aronson: OK, so the reason we're able to go in and own and operate these properties is because we are putting permanent infrastructure into their property.

Drew: And you're financing it as a service?

Data Utilization and ESG Goals

David Aronson: Basically what it is. OK, well, I understand the financial model. There's a lot of models in CRE. So let's talk about the EV infrastructure. What data does an owner actually gain from that EV infrastructure and how can that data tie into the broader digital ecosystem of a property?

David Aronson: Well, that's a really good question. You know, I don't think property owners right now are actually using the data. They don't really care too much about the data to be candid. It depends where they get their source of money. And if it's coming from institutional investors, they do care. And even they, at this point, have not gotten to the point where they want to take the information from the charging station and understand the impact that it's having on the environment. OK, or on the property or the tenant. They haven't gotten to that point yet.

Bill: OK, will that tie into their ESG goals and things like that?

David Aronson: It absolutely does. And it absolutely will. And they will absolutely want to have this data from their EV charging station so they can present to their investors and their members. Here's how we're saving the environment.

Drew: Well, as you know, we're a big believer in the data and we believe a lot of data, not just EV chargers, but a lot of data on commercial real estate properties is just siloed and not being used or not being leveraged. This is one more instance of reality. That's the reality of it.

David Aronson: OK, and I know some of those I know just from the consumer side myself, I know that some of those third parties have like anecdotal options where people can share photos and comments about things like this one doesn't work. It's January 15th. This one doesn't work. So it's interesting because that's very anecdotal. Like I said, evidence, real evidence of the operability of up-down status. So it can save some people some time. But it's just one of those things that obviously needs some refining to go further into the system so that that data can actually be harvested and used for more efficiency in terms of keeping the uptime, you know, to maximize uptimes. That's the basic level is everyone wants to know how long you're up. You know, a station that's down doesn't do anybody any good. You know, we manage eleven hundred of them and, you know, we have a handful of them that are down every day. That's just private.

David Aronson: The interesting thing about that is the solutions when a charging station's down, 95 percent of them is just flipping a breaker switch. And you say, well, just flipping a breaker switch. So you go to that apartment property. Well, that apartment manager is probably not going to do it. They're going to send it to the leasing agents who have got more nervous about it because it's electricity.

Drew: Yeah, sure.

David Aronson: And so maybe they'll get there, find their maintenance man. Maybe they won't. Maybe they'll forget. And just flipping a breaker switch resolves most of the problems. And by the way, I have an EV charging station at home every once in a while. I need to flip my breaker switch. So it's not something unique to multifamily. It's just what happens with distribution.

Bill: I don't have one at home, but I know Drew does.

Drew: So, yeah, exactly. It's interesting because it makes me think like, you know, rewind the clock. However many years we would need to rewind the clock when people weren't totally comfortable with this.

Drew: Exactly the thing that we're talking about in the gasoline world. I mean, we get conditioned to what we get conditioned to and we accept it as safe because this is safe. This is proven to be safe. So I could see that changing as well as just adopting new technology, whether you realize it or not. That's exactly what it is.

Retrofitting vs. New Construction for EV Stations

Bill: Hmm. Yeah, that's nice. Well, OK. So in that same vein, considering the retrofit versus the ground-up build, what are those real costs and timelines that owners should consider or expect?

David Aronson: Well, retrofitting is completely different than new construction. I guess your question is more directed to the retrofitting.

Bill: Yeah. Yeah. I mean, either way, I could imagine, as you alluded to, it's a little bit more difficult. So every property is different. And we've learned a lot of things just because you have a set of plans that the city has approved and the general contractor has said, oh, yes, we've built it in accordance with plans and specs. We find that many cases that's not really the case. They've done what they want to do and it's passed inspection, OK?

David Aronson: Yeah. And they expect to have a friend. So anyway, you know, on the retrofits, every property is different. Every utility company is different. Every city is different. Every city has different parking regulations. Every city has permitting regulations. And they're all different.

Bill: OK. Wow. So I'm going to tell you what we typically do, OK? We typically look for extra electricity at that apartment project on their existing panels, OK? A lot of times we can do some things to borrow electricity or reroute electricity on those panels so that the EV charging stations can have power to use when they need it. But it all starts with the property. It can have the ability to need to be able to find some space in the electrical panel.

David Aronson: Yeah. So I look for at least a 40 amp circuit, OK? I look for more. I prefer more. But 40 is the bare minimum.

Bill: Got it.

David Aronson: Yeah. And after that, we have to run conduit, you know, which, you know, dig a trench, you know, get inspectors. Sometimes you have to tunnel under sidewalks and concrete. And that can be quite expensive. It's different costs all over the country. But once it's in, it's in. And, you know, that's the majority of the expense that we incur in putting up charging stations is that aspect. The charge stations are relatively inexpensive.

ROI and Financial Models for EV Infrastructure

Bill: OK. Just that infrastructure. Yeah. OK. So you're in continual communication with owners out there that are implementing these. What kind of ROI are they actually seeing? Does it vary?

David Aronson: It's all over the board. It's most of them, the ROI isn't going to move the needle. OK. On the actual operation of the charging station. Think about it. I mean, look, you want to make money versus lose money. OK.

Bill: Sure. Of course.

David Aronson: So if you're one of those companies that want somebody else to come in and pay for everything and put everything up and run everything, you're not going to get much of a return on your investment from the charging station. But if you don't have an investment, you have no investment in it. So when you feel a very positive return. But here's what you do get. Here's what you do get. You do get an opportunity to rent an apartment to people who drive electric vehicles and you get an opportunity to retain tenants and residents who want to drive an electric vehicle.

Bill: So let's look at that. If you most of the apartments that we're in, the average rent's probably eighteen hundred two thousand dollars a month. So I'm of the opinion that if you were to say, look, this resident who's charging their car at this charging station six times a month, OK, they're there because of that charging station. If they move, what happens to that apartment owner? They have to go release that two thousand dollar a month apartment and earn twenty four thousand a year and spend the money. OK. Or they don't get the resident in the first place.

David Aronson: So I like to say that I think personally the EV charging station is probably the most valuable amenity you can put in an apartment property.

Bill: Well, let's look bigger picture. I love that. I'm not arguing with it. When you zoom out, the infrastructure and especially multifamily isn't just about the cars, right? It's about data, energy management is about the environment and new ways of driving.

David Aronson: Absolutely. And of course, without the residents, you cannot drive any of that stuff.

Bill: Right. Let's do your point. And turnover is expensive. Occupancy is one of the big biggest I mean, vacancy, excuse me, is one of the biggest cost drivers. We're adding this whole space heading in the next five years and how should multifamily owners prepare for it?

David Aronson: Well, I think multifamily owners should prepare for it this way. Right now, there are a lot of utility companies and states that are giving grants out to install EV charging stations at multifamily property. If you happen to live or reside or the property happens to be in one of those states, if you're not taking advantage or letting a third party come in and take advantage of those grants and rebates, shame on you. They're not going to exist forever. It's all about being early. And so to me, the first thing you do is you do it because of the infrastructure that you get at a discounted rate. That's why you do it.

Bill: Okay.

David Aronson: The next reason is you also have that amenity that you have up. But to me, if I owned an apartment project, there's no reason not to put up at least two to four charging stations. And I've been in the apartment business for 40 some odd years in different capacities. I don't know why you wouldn't put a couple up. If you own them, some of the clients say, well, we had them up and we never got them used and so we were spending money and so we took them down. Well, you know, they don't realize that they spend more money on their swimming pool that doesn't get used six months a year than they do operating an EV charging station, which brings in revenue.

Bill: Yeah. There's the beauty of that data right there.

David Aronson: Yeah. We look at chargers as part of the digital infrastructure, even though there's a lot of power requirements, but it's because of the way it impacts the tenant and the way the data floats. So that data is so valuable. So we consider it part of the digital infrastructure on a property. And we have to set up whether it's wireless or wired so the cars can update while they're charging. We have to make sure that they are covered inside of a mesh network of some kind because they don't do it otherwise. They need to be updating while they charge. So there's a lot of impact to the tenant's user experience as a resident, rather just call them a tenant, right? The resident user experience.

Bill: Yes, there absolutely is. Wow. Before we move on to the next thing, you have anything else to add? You want to share an experience of a, well, you shared some losses of people not doing it. Is there a major win?

David Aronson: Got an email the other day from a resident at one of our apartment projects. They had sent to property management, OK, and the property manager forwarded the email to us and it said, can y'all install more EV charging stations because there's been more people moving here with electric vehicles and I can't get any time at the chargers that you have up. So what did we do? We went in to see how much those chargers were getting used. We can tell by the usage how many hours a day it's getting used and usually come pretty close on guessing how many vehicles are using it. We do get that data too, by the way. We know what vehicles using it and what hours and what time of day and how much they use and all this other stuff. But we went in and we also looked to see the billing rate and how we were set up the billing rate. You know, what we wanted to do was discourage people from coming home at 4.30 from work needing five kilowatts, but parking their car there all night. I don't want, and I'm not going to set up our chargers to where people pay an idle fee if their car finishes charging at, you know, 10 o'clock at night. It's not reasonable to expect that resident to go move their car and have somebody else move in. So we have to monitor and we monitor this and when we looked into it, you know, we realized from the data information that yes, we should be able to add a few more. And then we had to send the electrician out to go see if they had any extra electricity. And that's where we're at now.

Bill: You know, it's interesting the impact of one new driver a year using that charging station. Really interesting.

David Aronson: Okay. You can actually see all the data. I can see every bit of data. I know who's charging. I know the VIN number on their car. Whether you're going to take less NOI and have somebody else finance it or you're the owner are going to lay out CapEx to install more, the data is so valuable in building your strategy. Because maybe it's an IRN property and you don't want a ding of it all for overnight IO fees. But maybe it's just second day IO fees, things like that.

Bill: I've always wondered how they handle it at airports, but that's a whole different.

David Aronson: Well, it's funny. You bring up airports. I personally do not think any city should be putting EV charging stations at airports.

Bill: Yeah. I wonder that every time I walk by them.

David Aronson: It's a waste of money.

Bill: Well, yeah, we can digress.

David Aronson: And by the way, that's exactly what we see throughout the country. So many people are making decisions on these things for the wrong reasons. They don't really understand it. They're getting sold a bill of goods in many, many cases, and they're just not the right decisions.

Bill: Yeah. It's such a different ecosystem than the gas ecosystem. You can't pull into an electron pump and top it off in three to four minutes. Why didn't they ever put gas stations and parking garages at airport properties?

David Aronson: Right. It was so important to get refueled. I went on two or three day trips, and I've seen that car sitting there when I went in. I see that car sitting there when I come out. How could that be? It does not charge. By the way, it charges.

Future Trends in EV Charging and Digital Solutions

Bill: Five hours of those three days. Yeah, that's my point. Yeah, and nobody else could charge. I think that's fascinating though to see because there's so many things advancing at the same time. You know, the delivery rate of the electricity to the vehicle that is increased over time. You know, I mean I bought in in 2020 and it's increased a lot since then and it had increased up to that point.

Drew: So and even the delivery bus when you think about it right now. There's one charger to one outlet that goes into one car one to one to one down the line. So, you know I'm sitting here and this isn't a noob because I don't know the details of this industry like that. But it's like why isn't there a shared bus? You know, I can't 20 people pull into 20 spots and have a scheduled slot.

David Aronson: So there actually is. Okay, it's called load management. Nice. Okay, okay. But load management can only manage how much load you have going into that. I can put 10 charging stations on a 40 amp circuit with load management. But if all 10 are being used all I'm gonna do is get three kilowatts. Yes, and nobody's ever gonna get full if you need 100 kilowatts, it's gonna take you 20 hours.

Bill: Absolutely. Yeah, they do do that. And I'm aware of that one and it's the reason why I like the courteous Tesla driver in the days of Tesla only in Tesla chargers would say don't pull in next to the next Tesla always put that gap in because it's a two-to-one and you can charge twice as fast if you'll just courteously not part next to the other guy. And it's like it's one of those many things along this journey where it's like wow, that's gonna seem old. Our kids are gonna go. Do you remember when or maybe we'll be telling that to our kids, you know, suck up a big bulky cell phone. We used to carry around.

Drew: I think these things are right for technological improvements because in my mind what I'm thinking is like all of us on this right here all three of us have 24 hours in a day and there might a lot of people that we want to meet with and we schedule our time in chunks. Right, and we obviously we only have one minute, you know at any moment in time we can only schedule in with one meeting so to speak. So I just think it's interesting to think that like even if someone pulls into that in the load management terms that you were using right there. I'm familiar with that. But it's interesting to think that the technology could exist to where we say hey, you know what? I'm gonna pull in and I'm not gonna be able to charge until the 630 p.m. to 715 p.m. But I'm gonna have full rate so I know what's gonna happen in my car and it kind of gives the user more of an understanding of what's gonna happen if they leave their car there that moment. It's just interesting. Maybe that'll change maybe it won't because like I said, it feels like there's a lot of things changing for the positive along the way.

David Aronson: Well, there are and the whole industry is very very early. Okay, and so there will be a lot of changes in it before I mean, it's like the cell phone if you didn't connect the Internet to the cell phone. Think about what that just the fact that when they did that how it seems cellphones. Absolutely. Yeah, it became a straighter in your hand that happened to make voice calls instead of being a cell phone. Sit to the whole place with DB charging. It's gonna be you know, look, is there any reason you know all these different vendors? They all have software and and they all do mostly the same thing. What do I mean by that? Well, they do some most of them do load management. Most of them you can set your billing rate most of them stored in the cloud most of it you can upload from the Internet, you know. There's just so many things that almost all these companies do you and I as a user. We just want to go and we charge it doesn't matter where we are. We want to go plug in. We don't want to have to go to an individual app. We just want to go plug in and go.

Bill: Hey, I wonder what the future holds for all these software vendors who are doing the same thing pretty much. Okay, and wanting you to go to their app. I just want to go plug in like you just want to plug in you don't want to have to go through an app. You just want to and there's no reason why that can't happen. It does they know our car. They know our credit card and you ought to be able to plug in and it ought to be totally agnostic.

Drew: David we are on the same page because it optic wise we have a lot of services and even when we maintain full apps tenants don't use them and it's nice that they don't have to they can or owners. They could just use the service the app is there if they want it, but honestly nobody wants it. It's there. They don't use it. They would rather just have it work and be on there. That's what they want. That's what the resident one. Yeah, that's the owner wants data right investor wants the data.

Personal Insights and Wrap-Up

David Aronson: Yeah, well, this has been a master class on how digital and energy infrastructures converge and multifamily. So I really enjoyed the conversation before wrap up. We always take gas through what we call the extra floor. So I'm gonna let Drew move on to that.

Drew: This is supposed to be fun. We're not gonna run your chops here, David. Don't worry. Yeah, it's like speed round David. It's just a quick set of five questions to help our listeners get to know the human side of who you are. You know, so short short answers are great gut level response. Just five questions. So starting off what is a book or a podcast that has shaped how you think?

David Aronson: Well, I'll say startup nation, which is a book about Israel and how it developed from you know basically a desert to being the probably the number one technology on every aspect of our society what they do in Israel is amazing.

Bill: That is new to me. Yeah, it's on my part up nation. What's the best piece of career or life advice that you've ever received?

David Aronson: God, I've been so blessed to have so many great mentors and I'm not sure that I could necessarily point to one piece of advice because there's been so many of them. Of course that I've kind of taken it and I've put it into my own advice.

Drew: Yeah, well if it meant to share one not maybe it's not the most but just a prominent one.

David Aronson: I mean the people who know me would say the three no theory is is probably one of my most famous ones and it just came from you know having great mentors and that is no no in a business sense doesn't necessarily mean no because you get the opportunity to answer ask why and overcome an objective. You get that a couple times and after the third time if they say no, that's probably a real no. But you get you get a couple shots at no. So the three no theory is is one of them that you know, my mentors have given me. The other one that sticks in my head is you say a lot more by listening than you do by talking. It's hard to say on a podcast but I find the listeners the listeners are the ones that communicate the best.

Bill: Agreed, that's good. All right. What's a small daily habit or ritual that makes a big difference for you?

David Aronson: Mm-hmm got to do something to that something to get the blood flowing. It's beautiful. Absolutely. We talked about that a lot on your day.

Drew: What is something you've learned to appreciate more with time something? I appreciate more with time I think at this stage of my life, I appreciate the strides and the knowledge and the positive results that the people who work with me and for me get more than I do myself. I've had enough business gratification.

David Aronson: David. That's because we don't hear the body and mentor somebody to and then they have success that's very gratifying. Yeah, it's very nice. Yeah paying it forward.

Drew: All right, last one David when you're not working. What do you love to do that recharges you watch this?

David Aronson: Cool, where's your favorite place to go by this? I've been a lot of places thank God, and you know, I find that that it's a lot like the EV charging business. Every river is different. All right, I would say the Missouri River is the one I've caught the most fish on in Montana. It's the most consistent beautiful and it's not necessarily the hardest place to catch a fish, but it's the most consistent.

Bill: I said I was gonna say was are you ever catching so much that you have to exercise load management?

David Aronson: There you go, there you go. I'll switch the rod from one arm to the next.

Drew: Thanks for visiting the extra floor with us, how could listeners contact you Dave?

David Aronson: So we have a website it's www.refuelrefuelevs.com. Okay, and if you go there you can click on it and it gets to us directly.

Bill: Perfect yeah. All right, David. Thank you so much for today. It's been very very enlightening very helpful. I think our listeners are really gonna enjoy this one and thanks to our listeners for following along. Be sure to follow like subscribe click all the options because you don't want to miss another episode and we'll see on the next one here property performance. Thanks everyone.