You'll Never Guess Where You Can Now Charge Your Electric Car
All electric vehicles are being offered by an increasing number of automakers. The technology is amazing, but it suffers from a key limitation -- batteries. You can fill a gasoline car in a few minutes, but what do you do when your electric dies?
In the right areas of the country, that could turn car-charging into a key amenity for another player: Real estate investment trusts and the malls they operate.
Coast to coast
Tesla Motors is working hard to change the roads, trying to replace gasoline powered cars with electrics. Although the company isn't the only one selling electric cars, it is the one most associated with the vehicles. But founder Elon Musk, who some view as a visionary, realized more was needed than just a pretty car if customers were going to take his company seriously.
One of the biggest issues is range. An electric can go a couple hundred miles, but it's virtually useless for longer trips. That's why Tesla announced plans to build a nationwide network of charging stations, so "...owners of the Model S sedan can drive to New York from Los Angeles," according to Musk.
Since most customers are unlikely to drive across the country, that plan is likely a publicity stunt more than anything else. Still, it will help assuage the concerns of potential customers and support continued sales of Tesla's cars. In reality, the bigger issue is likely to be recharging around town. That's where most drivers spend their time.
Interestingly, car charging companies are expanding into new areas. One such comapny is expanding its presence at Federal Realty Investment Trust's Santana Row, an upscale mall in California. The tiny company says there's been enough demand at this property to support additional charging stations.
Federal Realty's Santana Row is almost a perfect location for charging stations. The facility offers 70 shops, 20 restaurants, a hotel, movie theater, over 600 apartments, and 65,000 square feet of Class A office space in environmentally conscious California. And hosting car charging companies is not only a revenue enhancer, it also burnishes Federal Realty's image. The company has charging stations at other properties, too, like Bethesda Row and Pentagon Row on the East Coast.
Another big-name REIT customer is Simon Property Group . For example, the company offers electric vehicle charging stations in its King of Prussia mall in Pennsylvania. It only has two stations, near high-end retailer Nordstrom, but that just goes to show that the real value may be more about appearance than usefulness, at least for now. And, like Federal Realty, Simon has the stations at other malls and discount outlets, too.
Not just REITs
REITs are really a tailor-made group for offering such electric car services. That's true for everything from office buildings to malls to apartments. However, examples of companies getting in on the act go beyond REITs -- Walgreens is trying to get in the game of hosting charging stations.
But it's a little hard to see the benefit for Walgreens. The company's stores are often stand-alone, and most people don't spend great lengths of time in a pharmacy. Sure, the charging stations allow Walgreens to talk up its environmental image, but they could wind up costing the charging companies more to maintain than they make.
That's why Simon's malls and Federal Realty's mixed-use properties are likely better fits. While hosting a car charging station shouldn't be a make-or-break issue for investors, it is an interesting tangent to watch. For REITs that serve high-end customers with destination properties, it could be a nice additional amenity. For other companies, like retailer Walgreens, or perhaps a local strip mall REIT, it could just mean fewer parking spaces in the lot.
Electric cars are great, but what's next?
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The article You'll Never Guess Where You Can Now Charge Your Electric Car originally appeared on Fool.com.Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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