Commercial Investment Real Estate July/August 2017 | Page 12

MARKET
FOR ECAST
Shifting Landscape
Changes in transportation are poised to transform
commercial real estate.
by William J. Kohler and Ross J. Altman
T
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July | August 2017
Urban Development
Historically, urban development has followed the location of
transportation centers and corridors. Implementing autonomous
vehicles, however, could reduce dependency on traditional public
transit.
People may possess greater ability to live and work wherever
they like. The need for city or commercial centers also might be
reduced, causing suburbs and other traditional residential proper-
ties to increase in popularity.
Residential areas may be more accessible to work locations
with the availability of autonomous vehicles, either used alone
or in conjunction with transit. Additionally, with less need for
parking, pedestrian areas may increase. Parking lots may turn
into infi ll buildings.
Building Design
Both residential and commercial buildings will dedicate far less
space to parking. With less parking required, some developers
may elect to simply reduce the size and cost of buildings. Other
developers, however, might prefer to increase the amount of space
used for other purposes.
Since parking in buildings can be particularly expensive to
COMMERCIAL INVESTMENT REAL ESTATE
he transportation industry stands on the cusp of a
remarkable evolution involving the deployment of
many technologies that promise to revolutionize how
people move about and potentially use land to support
those technologies. Vehicles will communicate to one another
through vehicle-to-vehicle connectivity and vehicle-to-vehicle
infrastructure.
That will facilitate communication of safety issues, such as
accidents ahead and near-collision circumstances. Connected
commercial freight vehicles will platoon to maneuver as a chain
of trucks, drafting behind one another to create fuel savings.
Vehicles also will become more and more automated, relieving
the driver of many duties, such as imminent hazard braking and
lane choices. Potentially, these vehicles will be driverless.
The increased mobility anticipated by implementing autono-
mous vehicles creates many possibilities.
Until user patterns and preferences emerge and stabilize,
the related effects on commercial real estate development
are tough to predict. Nonetheless, the ramifications are
potentially dramatic. Three broad real estate trends and their
potential changes may reasonably arise from adopting autono-
mous vehicles.