5 Questions With: Bhasin Properties | Generating Rooftop Revenue with Solar as a Tenant

Bhasin Properties, established in 1984, boasts a rich history of owning, managing, and leasing over 700,000 sq ft of class A industrial space.  In 2021, Bhasin forged a partnership with Solar Landscape, resulting in the installation of community solar projects spanning approximately 300,000 sq. ft. of rooftop space across four of their buildings in Secaucus, NJ. To delve deeper into this venture, we sat down with Akash Bhasin, the owner of Bhasin Properties, to explore the company’s journey into solar energy, discussing motivations, challenges encountered, impact, and potential future plans regarding solar and other clean energy initiatives.

Q: What motivated you to explore onsite solar?

A: The pandemic brought solar into sharp focus for me. Without it, I might have overlooked the opportunity altogether. During a time when many businesses were struggling, I saw potential in solar energy. As a multi-tenant landlord, I recognized that renting my roofs for community solar systems was akin to securing a long-term, stable tenant unaffected by market conditions. Regardless of economic fluctuations, as long as the sun shines, I receive a lease payment, essentially adding a worry-free tenant to each building. The consistent monthly lease payment served as a significant incentive for me.

Q: What was your approach to pursuing your first project?

A: After getting comfortable with the benefits and process of solar leasing, I strategically chose a building with a recently replaced roof. This ensured that the solar lease term would align with the remaining life of the roof. Additionally, for other buildings, I proactively invested in new roofs to facilitate the installation of solar systems. Recognizing that roofs over 20 years old often need replacement, I considered the upfront cost as a long-term investment. By evaluating the lease rate over a 20-30 year term and calculating the time it would take to recover the initial investment, the financial viability became apparent.

Real estate isn’t a business focused solely on today; it’s a forward-thinking, long-term venture. When you recognize the inevitable need for roof replacement, viewing solar as a means to offset that future cost becomes a logical and financially sound decision.

Q: Did you encounter any mental hurdles or concerns when initially exploring a rooftop solar lease?

A: Initially, yes. With a new building, I worried about potential roof damage. However, any concerns or issues regarding roof maintenance and repair are addressed in Solar Landscape’s lease. Specifically, Solar Landscape covers damages if any occur resulting from the solar installation or operation, and the solar roof lease didn’t void the roof warranty – that was a big one.

If you’re in the real estate business, you know that you’re going to have roof leaks regardless of what happens. So as long as the roof warranty is good, that’s what matters to me. Overall, the process was clear and Solar Landscape addressed all concerns upfront, which helped me to feel confident in my decision to move forward.

Q: How did you engage with tenants during the solar installation?

A: The main challenge was informing tenants about the project and temporarily limiting access to certain areas. With proper communication and lead time, it wasn’t a major issue. Since the community solar system sends power back to the grid and tenants are not utilizing the power directly, it was straightforward, and they adjusted easily. Addressing concerns about staging areas and answering questions about potential electricity discounts before installation made the process smooth.

Q: Have tenants expressed interest in solar or asked about it?

A: Not particularly. Given the absence of energy-intensive businesses in my spaces, tenants are more interested in electric car charging than solar. The community solar project primarily benefits me as the landlord, providing a stable income without affecting tenants’ electricity costs.