New report: “Mobility Shifts and Commercial Real Estate - Implications of Ridesharing; Autonomous Vehicles; Micro-mobility and Electric Vehicles” highlights how advances in mobility are having a profound impact on commercial real estate
NEW YORK, NY– Cushman & Wakefield today released its latest report in the firm’s “Tech Disruptor Series”, Mobility Shifts and Commercial Real Estate - Implications of Ridesharing; Autonomous Vehicles; Micro-mobility and Electric Vehicles, which identifies existing and emerging trends in the technology industry primed to reshape commercial real estate (CRE).
The report focuses on transportation shifts, including ridesharing, micro-mobility (e-scooters), EVs (electric vehicles), and AVs (autonomous vehicles) and details their impact, both present and future, on the commercial real estate sector, including implications for office space, transit networks, gas stations and manufacturing centers. The report also highlights major obstacles and challenges the transportation industry faces, as these new technologies grow.
“As transportation companies continue to innovate, consumer behavior is changing and a key question is how this affects commercial real estate. Mobility Shifts and Commercial Real Estate - Implications of Ridesharing; Autonomous Vehicles; Micro-mobility and Electric Vehicles offers new insights and a further in-depth look at the marketplace,” Revathi Greenwood, Cushman & Wakefield’s Americas Head of Research, said.
“Transformations in manufacturing facilities, office spaces, parking, gas stations, are just a few examples of how commercial real estate will need to adapt to the changing landscape of transportation. As urban commuters are spoilt for choice with options from public transportation to ridesharing, e-scooters, autonomous vehicles and electric vehicles, commercial real estate participants must be ahead of the curve to determine these changes and react accordingly.”
Top Ten Takeaways:
- Ridesharing, autonomous vehicles (AVs), electric scooters and bikes changing consumer behavior: Ridesharing is already reducing use of public transit and increasing the number of vehicular miles travelled, increasing congestion and pollution. These trends are set to accelerate with widespread AV use.
- First adoption in industrial logistics and manufacturing: Due to safety concerns, initial widespread use is likely to be in industrial – particularly freight and trucking, especially in sparsely populated areas.
- Private car ownership will survive – for now: Ridesharing does not seem to have reduced car ownership as yet. Consequently, parking demand for multifamily developments and single-family homes will continue.
- Frees up space: lots of it. Repurpose– or risk obsolescence: At least 34 percent of existing parking in the U.S. (61 billion square feet) and up to 140,000 gas stations will be at risk with increased AV and EV adoption by 2040 – 2050.
- Exploding demand from data centers, cloud computing, entertainment content, high-tech manufacturing, cybersecurity and original equipment manufacturers (OEM): In the Bay Area alone, mobility companies occupied just under six million square feet in 2018.
- Provides more location flexibility but location will still matter: As commute times matter less, companies can open offices in less expensive suburban locations, increasing suburban sprawl. As AVs reach full self-driving capability, expect re-densification of urban cores.
- Potential to erode transit-oriented development (TOD) premiums: TOD premiums might abate or even disappear over time. On the other hand, public transportation systems could be revitalized by self-driving mass transit buses or trains, particularly to combat increased congestion in major urban markets.
- Large, wealthy, densely populated cities with expensive parking likely to be “early adopters”: These comprise gateway cities as well as San Jose, Denver, Seattle and Philadelphia with early “mobility-as-a-service” (MaaS) adoption as well. Car-centric cities such as Phoenix, Orlando, Las Vegas and Raleigh/Durham, etc., are likely to see less change.
- Widespread adoption at least a decade or two away with many obstacles – regulatory, environmental, overall travel demand and legal: Regulatory and environmental factors remain wild cards as do declining overall travel demand and growth of other mobility options such as the electric scooter, public transportation and increased congestion. All these inject significant uncertainty into the actual trajectory and direction of change.
- Combine constants – need for talent, innovation centers, building amenities - with data, flexibility and efficiencies: Occupiers still want talent, and talent flocks to large, dynamic urban cities driving change and creating jobs. Building-level soft amenities, services and technologies that straddle hospitality services as well as data collection from buildings and occupiers (via surveys) are smart bets under any scenario. CRE players who focus on flexibility and efficiencies and can position assets to adapt to mobility changes are best placed to outperform their competitors
“We’re entering an era of next-generation manufacturing plants and facilities,” says Jeffrey Green, a Managing Director within Cushman & Wakefield’s Global Occupier Services Platform and Practice Leader of the firm’s Automotive Advisory Group.
“Assembly plants for industries like automotive are undergoing high-level design requirements, including higher ceiling heights, wider column spacing, greater ventilation and more. All of these factors are impacting the relationship between real estate companies, auto manufacturers and property developers in unprecedented ways. This requires us to come up with new solutions for our clients, from large-scale supply chain questions down to building structure assessments, and everywhere in between.”
Elisa Konik, Managing Director and Chair of Cushman & Wakefield’s Emerging Tech Advisory Group, and based out of the San Francisco Bay Area, is examining how the increase in technological innovation with respect to EVs and AVs is impacting commercial real estate in the marketplace.
“Silicon Valley is at the forefront of technological innovation and bringing to market the developments that will change how we view commercial real estate in the future. These advancements are inevitable, but they’re not unpredictable. It is our role, as commercial real estate experts focused on the tech sector, to keep our clients informed of tech trends that will impact them today and, in the future,” Konik said.
The report also lays out some near, mid- and long-term real estate opportunities. For entire list of insights and opportunities, check out the full report, but some of the notable examples include:
- In the near-term (now to 10 years), expect immediate changes to industrial businesses, including the relocation of large warehouses and distribution centers to suburban and/or less costly neighborhoods. With respect to urban offices, anticipate more dedicated waiting areas and/or bikeshare/scooter docks, as well as, dedicated parcel delivery zones to improve lobby traffic.
- In the mid-term (10-15 years), expect new employee parking space models to increase warehouse efficiency design for industrial real estate. In suburban areas, expect repurposing of parking for bikes and scooters for short distance needs, including building to parking or to lunch and from apartment to supermarket.
- And in the long-term (15+ years), expect cities to be completely redesigned with around changed mobility. This includes dedicated pick-up spots for autonomous vehicle fleets and a decreased need for truck stops, leading to redeveloped CRE opportunities along major highways.
Click here to read and download our ‘Mobility Shifts and Commercial Real Estate - Implications of Ridesharing; Autonomous Vehicles; Micro-mobility and Electric Vehicles’ Report.
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value by putting ideas into action for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with 48,000 employees in approximately 400 offices and 70 countries. In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.
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