The Battery Real Estate Play & Return Of Main Street With Aaron Shavel – RFP 95
Aaron Shavel is a professional engineer who spent most of his career in heavy civil construction, including years on the MTA subway projects in New York. He now advises on battery energy storage facilities being deployed across the Northeast and writes on construction, infrastructure policy, and urbanism on Substack. He is one of the sharper voices connecting how things actually get built to how communities actually function.
On this episode of The Real Finds Podcast, Aaron walked through the battery storage boom, the state of public transit investment, and why the highest-ROI infrastructure in most communities is the cheapest and most ignored.
The battery arbitrage window is already closing
Aaron draws the standard distinction between front-of-meter and behind-the-meter battery storage. Front-of-meter systems are tied to existing generation, either at a peaker plant a utility is trying to retire or at a solar or wind facility that needs something to smooth its output curve. This is where he sees the most durable value. The batteries charge during low-demand windows and discharge when everyone comes home from work at night and flips on the AC.
Behind-the-meter is where the developer arbitrage game lives. A developer finds an underdeveloped parcel, runs the numbers on how many megawatts will fit, prices the spread between peak and off-peak, and builds to capture the difference. Aaron’s observation here is the most interesting thing he said about the asset class.
The more batteries get deployed, the flatter the curve gets, and the less spread there is to arbitrage. The thing that makes the trade work is the thing the industry is explicitly trying to eliminate. It is a business model with a negative network effect baked into its foundation. It does not mean the window closes tomorrow, but operators treating this like a decade-long thesis are probably mispricing it.
What actually makes a good battery site
The answer is not just cheap land. Aaron flagged a project he looked at in New York where his first reaction was not about zoning or interconnection queues but about cranes. Each battery pack weighs roughly 150,000 pounds. You need a serious crane to set them, and a one-lane road with no staging area makes that effectively impossible no matter what the land costs.
At the same time, you cannot run the project too far out. Transmission loss is real, which is why so much of this activity threads a middle path: close enough to an urban core to serve consumption, far enough out to actually build. It is the same siting logic that governs most industrial real estate decisions in Chicagoland, just with a very different end use. The successful structure Aaron is seeing in New York is a public-private arrangement where the state agency owns the land at an existing generation site, handles the permitting, and leases to private operators who take on the construction risk and capture the revenue. The public side gets peak-shaving capacity without writing a check. The private side gets a site that would be nearly impossible to assemble on the open market.
The war on cars is a self-inflicted wound
Aaron lived in Manhattan for ten years and spent his career building trains, so you might expect a predictable take on transit versus cars. He does not give one. What he gives instead is a framing that commercial real estate people should borrow.
None of these conversations are zero-sum. The goal is choice. A walkable errand to pick up groceries, a bike ride to the library, a car trip for the Costco run. Three trips, one car, a better life. The moment transit advocates let the conversation become a war on cars, they lose the room before it starts.
Aaron’s entry point into the transit conversation is not light rail or subway extensions. It is sidewalks, crosswalks, and bus stops that have an overhang and a bench instead of a bent sign post. He calls these the little things, and they are the cheapest infrastructure any community can invest in. They are also the most universally agreeable. Nobody runs for city council on a platform against safe crosswalks. If you want to build political capital for larger transit investments, you start by demonstrating competence on the pedestrian-scale work.
It was hard not to think about Chicagoland suburbs while he was talking. Most of our commercial corridors are one bus shelter and one continuous sidewalk away from being genuinely walkable. The land use is there. The missing piece is the pedestrian-scale infrastructure that makes people feel safe moving between buildings on foot.
Pragmatism beats ambition on megaprojects
Aaron is bullish on Second Avenue Subway Phase 2 and the Interborough Express, but the reason is not the scope. It is the discipline. Second Avenue Subway is famously the most expensive subway in the world per mile. Going into Phase 2, the MTA went back to the contractors and designers and asked a question public agencies almost never ask, which is whether every line item was actually necessary. The answer saved the project several million dollars.
Aaron’s analogy is the right one. If you were building a house and could not afford marble, you would get quartz. You would not take out another loan to stick to the original spec. Public agencies often do exactly that and then wonder why the public loses faith in them. Being pragmatic is not the same as being defeatist.
The return of Main Street
Ten years out, Aaron is optimistic about the return of the downtown Main Street, and his reasoning lines up with what we are watching on Chicago’s North Shore. People want serendipity. They want the shop next to the coffee next to the bookstore. Big-box retail still wins for the Saturday stock-up run, but it does not win for the afternoon you want to wander, loiter, and buy a knickknack.
The sharpest observation he made on this was about storefront sizing. He pointed to a corner in Manhattan where two full-block retail spaces sat empty on one avenue while the surrounding blocks were fully leased with twelve smaller storefronts. The economics of a 20,000 or 30,000 square foot retail space in a walkable corridor no longer pencil in many markets. Ten 1,000-square-foot spaces do. Developers and landlords who are still trying to push the big-footprint format into small-format corridors are fighting the market. The buildings that will win the next cycle are the ones with divisible ground-floor retail and enough flexibility to chase the tenant mix the neighborhood actually supports. That is a positioning conversation worth having with your landlord representation team well before a major anchor tenant rolls off.
Where autonomous vehicles fit
Aaron is honest that nobody has the answer here, and he thinks it would be foolish to pretend otherwise. Fifty years ago, cities were confident that running interstates through downtown neighborhoods was the right call. We are still cleaning up that decision. The promise with autonomous vehicles is that parking mandates collapse and families of four own one car or none. The question is where the vehicle goes at two in the morning when it is not making a trip. The built environment has not begun to seriously plan for that, and Aaron’s advice is to hold the humility and watch the tipping point rather than assume we know how it resolves.
Advice worth taking
Aaron closed with career advice that applies well beyond construction. Be curious. Expertise in one thing does not preclude expertise in others, and the people who keep layering adjacent knowledge onto their core competency are the ones who stay dangerous across a long career. And do the homework. Walk into the meeting knowing the file better than anyone else in the room. There is no substitute.
Connect with Aaron on LinkedIn and on his Substack, where he writes on construction, infrastructure policy, and urbanism.
The Real Finds Podcast is hosted by Gordon Lamphere, Vice President at Van Vlissingen & Co., and features conversations with operators, investors, and developers shaping commercial real estate and the built world. New episodes drop Wednesdays at 3 PM CT. Daily market commentary lives on the Real Finds blog.