2017 is shaping up to be an exciting year for the mobility industry. We might soon see completely autonomously driving cars on the road, while ride hailing services like Uber and Lyft are taking us closer to not even needing to own a car at all.
As a commercial real estate professional, these trends are sure to rock your world, so you’d be wise to pay attention. Here, we’ll run through some potential effects these shifts in mobility could have on the commercial real estate industry.
But first, let’s take a step back…
What is mobility anyways?If you guessed that mobility is just a fancy new buzzword for the automotive industry, you’d be falling short.
Ted Serbinksi, of the Techstars Mobility accelerator program in Detroit came up with this brilliantly concise definition:
Mobility includes technologies and services that enable people and goods to move around more freely.
Serbinski intentionally leaves the word “automotive” out altogether, because, as he puts it, “The world is changing incredibly fast. How people get from point A to point B is changing too.” Cars are no longer the central focus of how people get from A to B, instead, mobility represents the intersection of automotive innovation with tech. So, while car companies like Ford and GM will likely have a major impact on the mobility industry, they aren’t the only ones. Tech companies like Tesla, Google, and Uber — as well as emerging companies like Bla Bla Car and Scoop could be major players to watch as well.
In its recent report, Innovations in commercial real estate Preparing for the city of the future, Deloitte predicted the potential impacts of mobility on the CRE industry. We’ve summarized their findings for you here:
1. Reimagining urban spacesAutonomously driving cars are en route, and faster than you might think. Bill Ford promised that Ford will ship driverless cars by 2021, with other companies like Tesla and Google right on their tail. This will likely have major effects on urban planning and real estate as many facets of urban and suburban ecosystems currently revolve around the needs of traditional vehicles.
If driverless cars become the norm, gas stations and parking lots could become obsolete, meaning vast sections of central business districts (CBDs) will need to be put to use in different ways. Parking spots along sidewalks will no longer be necessary if cars can be summoned, rather than parked downtown, opening up valuable space for new retail businesses or green spaces. Although it’s difficult to predict, Deloitte posits that more space becoming available could even lower the value of real estate in prime areas.
2. Redesigning warehousesDeloitte also predicts that the adoption of self-driving cars, in addition to increased use of drones, could turn the supply chain logistics and warehouse industries on their heads. Driverless trucks would likely affect the location requirements of warehouses and if autonomous vehicles are used to operate within the warehouses themselves, facilities will need to be redesigned.
3. Shifting demographicsAnother key impact of the mobility revolution on commercial real estate could be increased access to urban centers for demographics not previously known to be mobile, namely senior citizens, the disabled, and young people.
In particular, if senior citizens become more mobile, or are able to summon goods and services more easily, we might see the need for senior living facilities dwindle, according to Deloitte. This would also impact the demand and placement of healthcare facilities, as these services could foreseeably be provided in a mobile way as well.
While most of these predictions are hypothetical at this point, the pace of change in the mobility industry is unprecedented, so they should not be ignored. Some commercial real estate professionals are already taking small steps to ease the coming transitions, such as partnering with ride sharing companies and offering dedicated parking spaces for car sharers. Above all, CRE professionals should be prepared to constantly reevaluate the impact these developments could have on existing and future property planning to avoid being left behind.