Technology is ever changing, and so is the markets involved with those technologies! In particular, transportation is a large means of income for commercial real estate due to its involvement in potential customers. Not only does transportation dictate the potential customer base, but also can dictate where homes are located based on the need for parking and thins relating to vehicles and the needed space.
So how exactly could driverless cars impact these factors?
Public transportation is huge for commercial real estate that has parked themselves next to the public transportation stops in hopes of racking up some more attention and customer potential. Not only does public transportation help with potential customers, it has also been attributed as a factor in raising the value of property due to the ability of an easy commuting opportunity, especially for millenials who have a low car-ownership rate. So basically public transportation bolsters it’s surrounding developments.
So how would driverless cars affect this? Well if the millenials’ low car-ownership rating has improved public transportation turn-out and increased potential value for developments around the public transport, then we can expect an increase in that very same variable with the very same result. More people who don’t need cars results in more public transportation potential, and thus an increase in the surrounding commercial real estate.
Parking Space Needs
Parking is a necessary means of living in todays busy world. If you can’t find a place to park, your late for that important meeting and you’ll no longer get that vacation time you had planned. Parking is the main action of our vehicle in our everyday life, the average time a vehicle is in use per day is just 5%. The rest of the time the vehicle is just sitting in a lot.
America has a parking foot print estimated at around 500 million parking spaces, which just so happens to consume more land than Delaware and Rhode Island combined! So how could driverless vehicles affect this?
Imagine a world where parking spots are no longer needed, this could be due to the removal of commuters’ demand for street and lot parking! Currently the estimated amount of parking space needs that would be reduced with driverless vehicles is around 61 billion square feet! So why is this? Driverless vehicles could potentially pick people up from locations like malls and homes and drop them off at their office locations or something of the like, and then go and park themselves in locations that are less packed!
This could potentially help and hurt. If parking spaces are removed, that is a loss of some vital commercial real estate opportunity, however, could also help real estate owners of different property types by no longer having to provide parking options, and also open up opportunities on existing parking spaces for new construction! If we consider this potential in locations that are densely packed and have a high land premium, there is a chance that a buyers market could be created, offering even more opportunities within an already densely packed area.
Driverless cars have a lot of potential to stir the commercial market and either help or hurt depending on the areas your talking about. Ultimately though, we do see driverless cars becoming more and more prominent in todays society as they are given the green light to test the autonomous cars in real world applications and situations.
What do you think? Will driverless cars become a new standard in the US?
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