In a recent study conducted by CBRE, Revathi Greenwood takes a look at the potential impact of self-driving vehicles on commercial real estate.
The impact of self-driving vehicles on commercial real estate has the potential to vary widely, depending on how the technology evolves and is adopted over time. Moreover, the technology’s ramifications are unlikely to be purely linear, due to confounding factors.
We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction. – Bill Gates
Although the specifics of its full, eventual impact remain uncertain, based on current visibility, some likely consequences include:
- A key disruptive technology and source of opportunity: Autonomous vehicles are likely to change transportation networks and the urban landscape dramatically.
- Early adoption in freight/goods transport: Warehousing, manufacturing and storage facilities will likely relocate to lower-cost areas; the subsequent drop in distribution costs may make online retail relatively more attractive.
- The old bringing in the new: The increased mobility that driverless cars would afford senior citizens may revitalize secondary retail in suburban locations. • Limited increase in urban sprawl: Following true driver substitution, some increase in urban sprawl in residential and destination retail is likely.
- Disruption in transit-oriented development: Premiums enjoyed by buildings near transit nodes may erode as development comes to favor highway access over aging rail/Metro. Suburban office parks currently inaccessible by public transport may see a renaissance.
- Explosion in the data center/cybersecurity market: Data center growth will continue to accelerate. Locating IT infrastructure closer to the end user is crucial in reducing latency, and therefore the need for fast and real-time traffic data will drive expansion into secondary and emerging markets.
- Prime parking real estate reclaimed: The advent of self-parking facilities will see prime parking lots and associated gas stations in urban cores reclaimed, with some reversal of the urban sprawl generated in earlier phases. This will affect not only development costs for new buildings, but also the value and usage of existing buildings with parking structures.
- Shift to self-driving “transportation cloud”: The widespread adoption of fully autonomous vehicles will likely instigate fundamental changes in the way we own and use cars, with a “pay-per-mile” model becoming common.