Autonomous Vehicle Tech Could Be The Biggest Disrupter In Commercial Real Estate
When autonomous vehicles go mainstream, the commercial real estate implications will be massive — from urban development planning to public transit impact and a shift in parking lot development.
Though driverless cars will benefit cities' live-work-play synergy in many ways, autonomous vehicle technology also has the potential to bring massive disruptions to the industry as developers are forced to repurpose properties in order to accommodate this new normal.
This is how autonomous vehicle tech will disrupt office, retail, industrial and healthcare real estate, according to a Transwestern report:
Employees' morning commutes would no longer end in finding a parking spot, meaning developers will need to rethink the utilization of parking.
Parking revenue averages 10% of a central business district office building's gross revenue, so if these spaces are not repositioned appropriately, developer’s could be facing a significant profit loss. Suburban offices could face even more losses if operators fail to monetize their often-abundant surface parking.
Instead of parking, new features including curbside pickup and ride-sharing lobbies could become sought after in future Class-A buildings.
The industrial sector may experience the biggest disruption of all.
Warehouse operations in particular will face a large shift because of their use of logistics and trucking. A number of e-commerce distribution centers, including Amazon's, have already started to implement AV technology in the form of self-driving forklifts and automated racking systems. The tech is beneficial because AVs can load and transport large volumes of material without the use of a human operator, resulting in better safety and efficiency in facilities.
When it comes to deliveries, automated trucks would be able to stay on the road for longer periods of time and with driverless vehicles speeding up processes in warehouses, trucks would require less time at each stop.
These factors could also require developers to rethink the location and size of their fulfillment centers and distribution buildings to allow for increased flexibility and less parking for warehouse workers.
AV delivery could solve a big problem for retailers as of late — the last mile.
With AV technology, deliveries would be able to reach customers faster and more efficiently. Trucks would also be able to reach their destination faster thanks to fewer required stops and better autonomous mapping systems.
Like office buildings, mall and retail properties would need to repurpose a large portion of their parking lots as fewer people would require places to store their automobiles when they shop.
Though not often discussed, driverless vehicles could greatly impact the healthcare industry as well.
Roughly 6.3 million auto-related accidents were reported in 2015, and an estimated 29% of those involved a drunk driver, according to Transwestern.
More AV’s on the road will likely reduce the number of accidents that take place every year, and in turn would also reduce the number of patients requiring overnight stays in a medical facility annually. This means medical facilities could either downsize or repurpose spaces.
As with office and retail, parking would need to be repurposed, but could be used as a drop-off point for patients with mobility issues, giving them easier access to the facility.