I have talked about autonomous cars previously. All of the coming disruption is just the next evolution in transportation. If you think driverless cars won’t happen in your lifetime, you’re wrong. Here is a link to a New York Times article about Ford putting these automobiles on the road in less than 5 years (click here to read). Starting in a month, Uber will be providing driverless rides in Pittsburgh (click here to watch a short video). Google and Tesla have already made a commitment. All these companies and more are spending billions of dollars to get in the game.
How the disruption affects commercial real estate remains to be seen, but here are a couple thoughts from an interesting article below:
- People will start moving back to the suburbs as commute times become productive. You can work in your driverless car.
- The demand for subways and other means of transportation will decrease, changing retail, office, and services.
- Parking will change dramatically, and the necessity for commercial parking garages will decrease. Suburban parking lots will be used for other purposes.
- A new real estate opportunity for “Car Nesting” will emerge. See below for more on this.
- The industrial and logistic companies are going to change drastically as their transportation process becomes more reliable and efficient. Driverless trucks can run 24 hours a day, 365 days a year. On a side note, what will happen to truck stops?
Keeping ahead of this seismic change in how we move around will be important for all of us to monitor. I promise to keep you abreast of the progress. I love talking about this type of disruption. Email me your thoughts to kick it around.
(Having trouble viewing the video? Click here)
SELF-DRIVING CARS: A GAME CHANGER FOR COMMERCIAL REAL ESTATE?
By Ben Sayles
July 20, 2016
So Where Are We and Where Are We Going?
Throughout history, the available modes of transportation have driven real estate development. In the Colonial times, cities clustered around ports, as ships were the main means of delivering raw materials, finished good and even new residents. With the introduction of the light rail, the “Streetcar Suburb” came into existence. The proliferation of the automobile meant that people could live in one location and work in another, thus began urban sprawl. During these successive periods of progress, infrastructure and real estate development were forced to adapt from a primarily pedestrian-oriented environment (save for the occasional horse and carriage) to an auto-centric lifestyle with ever-widening roads and ever-increasing need for parking.
Impact on Commercial Real Estate
While it is not yet clear how self-driving cars will ultimately take form, it is certain that their mainstream adoption will create shock waves throughout the commercial real estate industry. Blurred Lines: Self-driving cars will dramatically blur the lines between cities and suburbs as the transportation barrier between the two will likely be erased. The push/pull of urbanization and suburbanization has been a fascinating trend since the development of the modern city. Between 1950 and 2010, suburbanization was a dominant force, as people opted to live further outside of cities to get open space and a better quality of life, all the while accepting the commute as the price of admission. Recently, that mindset shifted as urbanization and the “liveworkplay” experience are equally prized by millennials, young families and empty nesters. With the advent of self-driving cars, along with the expectation of a reduced commute and better access, people will be able to live where they want to live, work where they need to work and play where, and when, they want to play.
Urban Impact: While city dwellers already enjoy high Walk Scores (https://www.walkscore.com/), self-driving cars could effectively meet any remaining transportation needs. Residents could reallocate the cost savings of car ownership, operation and parking toward things like better housing and entertainment. Entryways at many residential buildings will need to be redesigned to accommodate high volume pickups and drop offs. Self-driving cars would have an immediate impact on traffic. Not only do people speculate there to be fewer cars on the road, but also the synchronization of cars would hopefully allow traffic to flow much more smoothly and with minimal accidents. Whether autonomous cars favor urbanization or suburbanization, it is clear that the increased flexibility in transportation will allow urban sprawling to remain unchecked.
· Satellite Locations: These would be oneoff spaces,located throughout the service area. They could be akin to our metered parking spots of today or in dedicated spaces in different buildings, where a vehicle could go when it is not in service and await the next fare. It might also be a place where a vehicle could go for a quick charge.
· Home Base: It is very likely that service providers would also seek to invest in large parking garages that could house a large portion of the fleet during off peak hours (nighttime and weekend days) and where mechanics could repair the vehicles as needed.
Less than 10 years ago, the thought of the driverless car was still viewed as something out of The Jetsons. Today, we are living in an “on demand” world, and autonomous vehicles are another incredible technology to make life easier. Driverless cars are likely to bring about some of the most significant changes in real estate and land use within the past 100 years, as architects, developers and city planners need to recalibrate their perspective on transportation. While it is hard to predict exactly what the changes will be or what they will look like, it is a foregone conclusion that our world is about to dramatically change right before our eye.