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AUTONOMOUS VEHICLES
DISRUPTION & OPPORTUNITY IN CRE
The combination of autonomous vehicles + renewable energy + electric vehicles + on-demand ride sharing will cause the cost per mile of transportation to plummet towards zero. This could make private transportation more attractive and competitive, at all income levels, than public transit -> which could have a profound impact on real estate values.
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ACCORDING TO THE U.S. CENSUS BUREAU (2014), THE AVERAGE PERSON COMMUTES 26 MINUTES EACH WAY TO WORK, 20 PERCENT HIGHER THAN 1980.
45 Min = 15 days/year
90 Min = 31 days/year
AMERICAN CITIES WITH THE MOST TRAFFIC CONGESTION AND LOST PRODUCTION
LOS ANGELES
commuters spend an extra 170 hours traveling to and from work
due to congestion issues on its cities roads and highways
SAN FRANCISCO
150 extra hours
MIAMI
132 extra hours
NEW YORK, SEATTLE AND ATLANTA
other most heavily trafficked areas
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AUTOMATION LEVELS OF AUTONOMOUS CARS
44+ MULTI-NATIONAL COMPANIES INVESTING IN AV
AV WILL BE HERE FASTER THAN YOU EXPECT
The timeline forecasted for AV reality is
one that is less than the duration of typical CRE
leases and for the time it takes to
bring new developments to market.
The first airline to operate a regular international schedule began in 1919, only 16 years after the Wright Brothers showed that people really could fly in heavier-than air planes.
For those businesses that stand to gain and lose from the driverless car, the future may arrive even quicker.
(the economist)
The shift to autonomous vehicles/transportation is perhaps the biggest technology disruptor in CRE since the development of the automobile
GLOBAL KEY PLAYERS
A $2.25 TRILLION MARKET IS UP FOR GRABS AFFECTING EVERYTHING
FROM RETAIL AND LOGISTICS TO URBAN PLANNING
REAL ESTATE IMPLICATIONS
Fewer consumers buying automobiles
CAR DEALERSHIPS
More standardization of parts, less personal car ownership
CAR PARTS MANUFACTURERS
Gas stations will no longer be needed in downtown areas,
freeing up cre dramatically
GAS STATIONS
Fewer accidents occurring because computers are in control
INSURANCE COMPANIES
AV fleets could go to their corporate repair shops and with
fewer people owning cars, less demand
AUTO REPAIR SHOPS
WASHESAV fleets would go to their corporate repair shops
and with less people owning cars, less demand
CAR WASHES
With an AV, you can drive for as far as you need to without
taking a break for sleeping
HOTELS/MOTELS
Once AV becomes mainstream, people will opt for an on demand car
versus the headaches of dealing with hassels of short haul flights
AIR TRAVEL
Today, oftentimes, food stops are based on impulse and the convenience of a drive through
window versus consumer choice and even quality. When in an AV there is less chance of taking
a detour from your route when the coordinates have been input
FAST FOOD CHAINS
Passengers in an AV can now consume news and entertainment
without worrying about traffic which means more opportunities
for content providers and advertisers
MEDIA & ENTERTAINMENT
PARKING IMPLICATIONS
FEWER CARS ON THE ROAD
Fewer Parking Spaces – Smaller Garages
FEWER PEOPLE DRIVING THEMSELVES
More Areas Needed For Drop Off/Pick UP
FEWER CARS USING
PAID PARKING GARAGES
Revenue Losses for Paid Parking Providers
Los Angeles International Airport
Derives 20% Of Its Revenue From Parking
CASE STUDY
Lyft partnership with mixed use developer, Irvine Company, to provide ride credits
for employees coming to and from work / the proximate train stations.
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CASE STUDY
In 2015 Caruso Development, famously added an Uber Pick-up and Drop-off area at their destination shopping mall, The Grove LA, for guests.
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During the Christmas holiday’s Caruso offered their VIP shoppers free
Uber rides to their destination malls.
CASE STUDY
Lyft and Uber have entered into partnerships in the healthcare market.
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Example: Lyft is partnering with providers like Blue Cross Blue Shield to provide free transportation for non-urgent medical appointments
“to alleviate one of the main causes of missed or delayed appointments” due to lack of transportation options.
3.7mm people miss appointments annually, due to transportation.
REAL ESTATE DEVELOPMENT
IMPLICATIONS
Areas with minimal development
and Low land/building pricing
RE-PURPOSING THE
PARKING SPACE
THE SHIFT BETWEEN
PRICE/VALUE AND
PUBLIC TRANSIT
THE EX-URBAN OPPORTUNITIES?
WAYS TO DESIGN PARKING GARAGES
FOR MAXIMAL OPTIONALITY
THE TEMPORARY NATURE OF RE IN THE FUTURE
Burning Man Structures3D Construction
FLYING CARS MAY BE EASIER TO ROLL OUT THAN AUTONOMOUS
VEHICLES BECAUSE FEWER ROADBLOCKS
BUT PERCEPTIONS ARE THAT RE IS IMMOVABLE WHILE
TRANSPORTATION, BY DEFINITION, IS MOBILE
AUTOMATION OF CONSTRUCTION
BRINGING BUILDINGS UP AND DOWN FASTER
If LOCATION, LOCATION, LOCATION matters less…Then, what will matter more…
EXPERIENCE? BRAND? COST?
THE $2.25 TRILLION QUESTION
REGULATORY ISSUES
CHINA
Concentrated government rule allows for easier regulatory environment
Autonomous vehicle friendly infrastructure investment
Decrease of petrol taxes in favor of cleaner vehicles
SOCIETAL IMPACT GLOBALLY
Less road congestion and car accidents
Urban planning and infrastructure re-think
New age of robotics and technologies
Employment opportunities and losses
Fast food retailers, rental car agencies and airlines need to rethink A new normal
THE FUTURE
15 years ago, autonomous cars were
integrated into science fiction stories,
along with flying cars and virtual reality.
Well, the future is now
FLYING CARS
Near .future reality?
Drones are carrying heavier loads. What is the next step?
Thoughts on first application of a flying car
VIRTUAL REALITY OFFICES
Will we be stepping into a hologram to go to work?
It’s about the EXPERIENCE!
How to compete or out-compete next week, next year & in 10 years
- Is AV technoloav going to increase the size of suburbia or is it relevant to urban centers?
- Can companies move to cheaner areas naving lower rents should AV make it easier for logistics, worker commutes etc?
- What are the imblications on emplovee incentives and retention in relation to last mile transportation to/from work?
- If distance matters less. is it goina to be more important to offer amenities to workers versus convenience?
- Will ride sharina do un as AV fleet cars come into existence?
- What do we do with the excess parking lots and street parking snaces?
- How will cities deal with the immense amount of lost revenue from parking and parking tickets?
- How will local governments mandate new street regulations due to AV?
- How will urban planners make a smarter citv?
- Will shared mobilitv impact funding investments on mass transit proiects versus roadwav infrastructure canitalization?
- Are geoaranhicallv spread out cities in a better position to take advantage of Autonomous Vehicles/Buses versus wealthier municipalities or more denselv onulated ones?