By Kathleen Farrell
Volvo’s surprise announcement that it will phase out the internal combustion engine by 2019 should be a wake-up call across industries that disruptive technology is already impacting short-term business planning. Anticipating how the economy and human behavior will be reshaped in the years ahead is an important exercise that should inform business leaders’ decisions and help position their businesses to more readily adapt to the future.
Commercial real estate is not disconnected from the challenges and opportunities posed by technology. Quite the opposite; it will be at the epicenter as outside forces impact how people live, commute, work and interact. As commercial real estate leaders, we should be mindful of how the developments we’re building now will be used in 10 or 15 years, when today’s emerging technology has become tomorrow’s ubiquitous convenience.
Here are four technologies and trends that could shape commercial real estate in the not-too-distant future.
Fully self-driving cars aren’t too far from becoming a reality. In fact, Michigan authorized testing autonomous vehicles on public roads, and the University of Michigan will soon deploy autonomous vehicles around at its engineering campus in Ann Arbor.
While a single campus may seem like a small example, the University of Michigan’s research could soon open up new possibilities for people who would otherwise chafe at a long commute. If the car becomes a mobile workspace, driving to the office becomes productive work time and the distance traveled is less important. It’s conceivable that the suburbs could become a magnet again for people looking for more affordable housing and access to amenities like golf courses, walking trails and better schools.
Flexible work arrangements and the normalization of teleworking could further accelerate a return to suburbia spurred by autonomous driving. These two converging trends may cause more people—including aging millennials with school-aged children—to look beyond the urban cores and close-in suburbs for affordable and spacious housing.
THE SHARING ECONOMY
If the sharing economy lives up to its hype, the implications for commercial real estate are enormous. Ride-sharing companies such as Uber and Lyft are already well-established, but driverless vehicles could transform these services from a convenient option to a groundbreaking alternative to car ownership.
As ride-sharing companies mature and autonomous vehicles drive down the cost of rides even further, will it even make financial sense for Generation Z to own cars? What does that do to the footprint and design of multifamily developments? If people can rent out their self-driving cars to a ride-sharing service while they’re at work, will there still be a need for massive parking garages connected to office towers? Could it open new development opportunities for sites now occupied by parked cars?
Source: Commercial Property Executive