One of the most notable trends currently stemming from ongoing rate hikes and rising rents is the movement from would-be homeowners to high-end renters. As this class of renter, often young professionals with enough cash coming in to afford upscale amenities, turns to renting, property owners and managers are looking for ways to capture this segment and reduce churn of existing tenants.
A very interesting way they are doing this is through EV (electric vehicle) chargers. Not only are EVs naturally starting to reach widespread adoption throughout the U.S., high gas prices are also further accelerating their usage and increasing demand for charging locations at home and work.
Xeal is a company that catches my eye. Using its patented technology, it provides electric vehicle charging infrastructure that removes the connectivity roadblock and enables EV charging in any location. If a user does not have service, its protocol still allows users to authenticate and charge, with the system sending through payments at the next possible time.
An obvious area this technology makes sense is multifamily and commercial properties, where high-end renters are looking for EV charging.
FinLedger spoke with Chris Moreno, Xeal’s newly named VP of Real Estate and Channel Partnerships, about his new role, how property owners are using EV to attract renters and the way Xeal is spreading its charging technology throughout the U.S.
Q: First off, could you just give me a little bit of your background?
A: Previously, I worked in the corporate world. My first company out of college was Macy’s department stores. So big change, right? Starting in the corporate world, I learned all about procurement. Buying $200 million worth of products a year to sell them in our stores, and I learned all about remote, and then automation. That’s kind of my education, and downfall 2009 is when I saw that technology is the future and where we want software to be. We want to be remote, or not. And so I joined a startup in 2010 called Laundry Locker. The idea was that instead of going to the dry cleaner or having someone pick it up and leaving it on your front doorstep, you could have these automated lockers everywhere. You could pick up our view, our vision of the future was that people were going to start ordering online. There was a small company in the late 2000s called Amazon that people were still getting used to, but wasn’t big enough yet. We knew that lockers can be used for dry cleaning, packages, food, laptops, anything and now so that’s what we built as Laundry Locker. Laundry Locker evolved into a company called DropLocker and then DropLocker involved into Luxer One. They were all software companies that happened to help people get things automated from these pickup locations. We were very fortunate to scale all three companies, and we sold all three companies. So we have three exits. Now you can see our lockers every time you go to a Home Depot, a lot of these department stores, you go to a FedEx store or a UPS Store. That’s us, those were the lockers we created.
From that I ended up shifting gears and started investing in apartment buildings as an LP. My wife and I, and then we started investing in startups. So I became an angel, and then I got the bug and then I went full-time into investing. I was part of $100 million fund that was investing in proptech, climate tech, fintech and mobility, and I got to work closely with all these great people and we made over 200 investments. It was incredible. We had over 18,000 startup founders contact us. I personally met with over 1000 of those founders personally, sometimes it was in group discussions. But what was cool about it is I loved, I still love, I still invest and still love real estate and proptech. You probably can tell I’m giddy, I get very excited about it. I’m very active, and it’s not just about the investing part to make a return in five to 10 to 15 years, because many of these companies will go to zero. But for me, it’s meeting incredibly smart people and then having a unique view on where the world’s going to be in three, five, seven, 10 years from now. That’s my whole outlook. Especially in real estate you’re building 20 years out.
Q: How did you come into contact with Xeal?
A: For me, charging has always been the space that I was excited about. But as I said, there’s just not enough cars out there yet. It wasn’t really pulling my strings, it was more of a climate discussion. That was when I had met Xander [Isaacson]. I had heard about Xander and Nikhil [Bharadwaj] when they were early on, and I had known some other investors and advisors who have been working with them. I started to get to know him a little more last year. What was great is he did a great job of following up.
They’re unique and I really look for unique insights. And then I also look at where is there massive friction, and then where is there really poor NPS (net promoter) scores. I had a Tesla, and when I did it was really hard to fin places to charge because number one, every single place was packed. You went and tried it in San Francisco, and I couldn’t even have my own charger at my apartment. The point is when I go find a place that was sometimes free or sometimes charge, it was impossible to get a spot or you couldn’t connect. You’d have the app, you try to download it. Tesla superchargers work but are were expensive, right? There’s a big problem here. I started talking to people and realizing that connectivity, connectivity. You will look at a lot of spaces, and if the internet is down you can’t pay with your cards.
I started thinking more and more about how frequently it happens. Solving for the hardest thing, which is connectivity. We’re always competing, right? Who’s first? The consumer. So when you’re at your apartment building, you’re at your work, you’re at a stadium, wherever you are. You have competition for the data. We’ve eliminated that need, and what excited me was I kept seeing their growth. I kept hearing about their patented technology and I said there’s really something interesting here.
There’s dumb chargers which can’t even meter or charge, there’s smarter chargers, and then there’s what we’re doing which takes it to a whole other level. There’s a protocol of all the chargers talking to each other. Utilizing the network, reward good actors and also says, “Hey Joe, you’re off the grid” or you don’t reconnect. Don’t worry, Chris comes in next and he pulls people’s the charges automatically. I always look at cost. I was in procurement.
When I talked to these owners, when I was at Luxer One, their biggest thing is what’s it going to cost me to build that. Not just buy your product, but what’s it going to cost me to put in IT infrastructure, just for you? What is it going to cost me for running the gate, for us that was a big thing of cutting costs for them. I talked to their investors, they have Modern Ventures, they’ve got some other great folks. But I look for the why, the team’s leadership then I look at founders even when I’m investing. I always ask what I want when I get excited to work for this founder. And I did not play on it, but when they said I could come and work with our team led by Eric Roseman.
Eric is incredible, his due diligence and his write-ups on startups, and then at Lincoln he led many investments into proptech and fintech looking at climate. We were talking last year and when he told me he joined the team I was like “Wow. Okay. There really is something here,” and then we’ve just stayed in touch.
So for me, I’m brand new to the team. I’m super excited, hitting the ground running, and I really came on to find the right partners who want to be partners and distribution. Reselling and installing at the local level. So we will have national partners and then we’ll have localized partners, and that bodes well for us because we don’t have to hire 200 salespeople. I can have 200 to 300 people in the field, who also can give great customer service so that I can install faster. I can give them great service, and that’s what we’re hearing in the industry. Again, no offense to anyone else, but there’s some bad actors who aren’t getting great response times. I’m hearing people who’ve already opened their buildings, have zero chargers, and they have no idea when they’re going to arrive due to supply constraints. So with us, we’re winning a lot of those deals where they’re coming to us and saying, “Hey, can you install?” Absolutely. We can make it happen.
Q: What is that choice to go local first, and really does what does that give you over trying to do things at a large, enterprise level?
A: I think number one, that’s how this industry works. I used to work at ASSA ABLOY before I went into investing, one of the largest door opening companies in the world. They have distributors everywhere, probably thousands in the U.S., if not tens of thousands. They work with GCs, electricians, etc, who install their door locks and solutions. For me its very similar, and I’m looking to partner with people. That’s the best way that these people, who are already installing, can work with us. How I see it is like lockers. When we first started that, we were the number 50 thing on their list. They said we don’t need this, package isn’t our problem. And what happened is lockers soon became the number one thing that people want it.
The difference with EV charging and why I believe this is a critical time. A year ago, two years ago when gas prices were a year and a half ago, prices in Atlanta were about a $1.75 a gallon. Now they’re $5.25 when I pulled up this morning. That’s over three times the price. When you think about it, gas prices have skyrocketed. It was a nice to have in your property. You might add two, four or eight.
Now, properties know having a gym or a nicer gym doesn’t decide whether someone’s going to live there or not. The EV charger, it does matter if you have them. Today you have to have them. And when I go there, if I don’t see an EV charger, I’m not going to tour and I’m going to talk to your staff. And ownership have told me this. They said it was a learning lesson, because they weren’t hearing about it, and then I realized, wait a second, top renters are moving out because we don’t have EV.
But the funny thing is, I also ride in EV when I’m an Uber or Lyft passenger. I always take the green option. And I asked every single person how they like the car? They all love it, because it’s so comfortable, it’s fast, customers love it and you get better tips. They also aren’t paying for gas. They are literally making way more money by driving this EV.
The second question I asked is, “Where do you live? Do you have your own charger?” And they say said they only have 5 chargers in their apartment building and 20 EV drivers. He said “We’re competing for the same charger every night. Sometimes I have to sit there and wait because I have to have a charger when I go to bed, or I’ve made friends with the people.” That’s the hard part for owners, to know what their residents aren’t telling them or what they’re missing out on with a renter.
So this is blowing my mind. I was not prepared for that. This is a decision-maker between living in a building, or moving out to the building across the street and paying more. They will pay 50 to 100 bucks or more for spot, and then sometimes also charging more. It’s incredible.
Q: When it comes to finding partners and multifamily residences, are you looking at new builds as well? How do you view those two sides?
A: Absolutely. New buildings are always right, because in new buildings they can plan for it ahead of time with the power. There’s so many mandates now for new construction that they have to have a certain number of EV spots. Number two they have a certain percent, whether it’s 15% or 20% that are already wired ready to go and then about 80% that are ready. It all depends by state, but we help teams with that. We have and I love that we have a rebate team. We have a team that helps with the installations, and then we we use local installers nationwide. So we don’t actually do the install. We partner with great people who those properties oftentimes already worked with. Usually with a property, let’s say I have a GC (general contractor) or I have an electrician that I love to use, so I will certify them to work with them. But a lot of times in my previous life, we always had to use our own people which slowed down the process. We can move a lot faster now.
Q: It sounds like people who don’t have them are jumping to get them installed. How do you know who those people are and how do you get in front of them?
A: New development is a no-brainer. It’s like every new development is putting in a package logger or a package system. Every new development is putting in EV charging. It’s just determining how much and I think people are unsure. They’re still at a level where they’re unsure. And the people I’m hearing from, some people are only putting in five or 10%. We had a call yesterday with one of the largest REITs in America, and the Vice President said, “Why are we only thinking about 20% of our building?” Obviously he’s going high. He’s like “We’re putting EV in 50% of the number of spots in the building,” and I think it’s like 75% or 80% of the number of units and he’s like, “I want to have these in now. I want to be the first mover and I want to get all the highest renters.” He said if someone’s driving Uber in our class B or class C, you know our workforce communities, I want those Uber drivers who are making good money and having the nice cars. He’s said it’s a reflection of our community to have a new Tesla or Rivian electric vehicle. I thought that’s really cool.
Oftentimes I remember I’m not selling. I love to learn what people love and what they don’t love. And I like to see where the industry is going and to hear people really get it on the ownership level of saying, “We’re missing out.” You know there’s certain things, like putting in a nicer pool, you know you’re going to see a direct increase in rent. When you’re actually able to get higher end renters who have the Teslas, who have the new Ford F-150 coming out and love it. The new Honda or KIA, all these are cars. They’re seeing higher rent and then they’re seeing a per charge, per spot or on the on the revenue of the EV.
I believe in apartment owners and commercial office buildings because 90% of charging happens at work or at home. And I believe that apartment building owners and commercial office owners will be the gas stations of the future. We’ve talked about having a metal shell station or having them at your local Exxon or BP. But why do I want to sit there for 45 minutes at a gas station when I can do it at an office. I can get some work done. I can do it in my home. That’s just a way better experience in my opinion.
Q: Maybe that’s how you get people back in the office.
A: I mean it’s a no brainer. You think about how much it costs to fill up a tank. For some people it’s over 100 bucks to fill up the tank. If I’m filling up four times a month, that’s $400 a month. If I can pay my apartment building $150 a month to fill up, that’s a massive savings. Maybe it’s even less, they might incentivize me and it’s only 60 bucks a month, but there’s definitely revenue to be there and better NOI (net operating income) for all the real estate owners.
Q: I know Xeal and EV in general is hitting the East Coast more and more, and the West has been on electric, but then there’s also this whole middle area of the country. What are your thoughts on bridging those two sides and where do you see the middle of the country as far as EV stuff goes?
A: For me what’s great is that I absolutely work with people who are installing right away, oftentimes in the larger cities. But now to your point. What’s unique is I talked with some car dealers, because I’m trying to get an EV for our family. What I’ve noticed is, it’s based on allocation you are seeing with the flight to other cities. I have friends who just moved to Boise, Idaho, and they have a Tesla. I have a friend who’s in Kansas City, Missouri, and they have the new Ford F-150. It’s everywhere. It doesn’t matter. You don’t have to be in Atlanta, you don’t have to be in Miami or New York City. I think we’re gonna see more adoption in the cities where people are driving longer distances. What you’re seeing is hybrids in a lot of cities where you only go five miles a day. You’re seeing people who commute an hour, 60 miles each way, they want the full EV.
It’s funny because people think Xeal is originally great for underground or in a garden-style community or high rise. It actually works everywhere, and because oftentimes when people are having to install they’re having to say well wait a second. If the power is here, and it’s against the building, we might have worse cell service so let’s move the EVs over here. You’ll see a lot of Tesla stations away from buildings, right in the parking lot and in the open. We don’t so that was great. We can install anywhere. It doesn’t matter if it has good self service or not. We are a good use case for every single property.
Q: What are the biggest challenges and goals you want to meet moving forward in this role?
A: I love working with the smartest people in the world. And so when I get to work from great people, learn with great people and share incredible ideas. I love learning something new every day. That’s my biggest thing. So working with incredibly inspiring real estate professionals, I love it. I get to work with all these folks who own, develop and manage, and they want to see cool technology. Another big thing is I’d like our chargers to be in at least have 100,000 locations by next year. That’s a very big goal of mine over 100,000. This year we’ll be in in over 10,000 locations by the end of the year.
The other big audacious goal is partnering with all types of other technologies and services. Whether it’s like a Starbucks, whether it’s your local Home Depot or whatever location. Even picking up propane, wherever it is where there’s that lag of being able to authenticate someone that is the future. If you have the car, why wait for the car for that location to have to connect to the cloud. You already know who I am from my phone, we already have NFC and Apple Pay, and we have these trust mechanisms so we can use the person’s phone already to connect and and it makes it much easier. I’m excited about being able to license our technology and partner with other people in unique ways I probably don’t even know about today.
In other recent proptech news, Built Technologies announced launching its contractor management and project monitoring solution for lenders, Project Pro. Bethea Consulting also launched a new property damage assessment solution.