self driving car - impact on real estate

Driverless Cars: Impact on Real Estate

Rodrigo AmadoEmily Dunn Pauline MartinKshitij ParasharClelia Schwing

Agenda

What is a driverless car?

Impacts on:- Parking- Retail- Residential

Companies Involved

Driverless cars will have profound impacts on our cities and the way we live.

90% Driveless

cars

90% Driveless

carsX2 Capacity

Reducetime by 60%

on Motorway

Impact on Parking

Saved space = More recreation!

Parking Space, Now

Ride Sharing = More Green!

How parking affects the economics of a real estate project

Source: CBRE Research, Q1 2016

Commercial Real Estate

Single-Family Real Estate

Development cost Occupancy cost

0

20

40

60

80

100

120

140 1 additional parking space

Cost/unit Volume/unit

+25% -25%

How parking affects the economics of a real estate project

Source: CBRE Research, Q1 2016

Commercial Real Estate

Single-Family Real Estate

Development cost Occupancy cost

0

20

40

60

80

100

120

140 1 additional parking space

Cost/unit Volume/unit

+25% -25%25-30% Mortgage

How parking affects the economics of a real estate project

Source: CBRE Research, Q1 2016

Commercial Real Estate

Single-Family Real Estate

Development cost Occupancy cost

10-12 % 4,5 %

0

20

40

60

80

100

120

140 1 additional parking space

Cost/unit Volume/unit

+25% -25%25-30% Mortgage

Offices’ Underground garage

Driverless cars could allow people to live wherever they want

Miles spent for park-ingMiles getting to your destination

30%

70%

Impact on Parking: Increased Flexibility

Impact on Parking: Commercial

800 million Sqft

1/8 commercial parking

Impact on Parking: More Office Space!

2OFFICE INVENTORY

Parking Space Itself, Decreases!

Impact on Retail

Stretch out

Impact on Retail

Stretch outEasier

commute

Customers

Impact on Retail

Stretch outEasier

commute

Customers

Delivery

Commodities

Impact on Retail

Stretch outEasier

commute

Customers

Delivery

Commodities

Lifestyle &

Entertainment

Impact on Retail: Rent decreases

Rent

Density

Current situation With driveless car

Impact on Retail4-Quadrant Model

1

2

Impact on Retail4-Quadrant Model

1

23

4

Impact on Retail4-Quadrant Model

3

4 5

6

Impact on Residential

“Cities may become places where no one lives but where everyone works and meets” (Noah Smith, 2015)

Impact on Residential

Easier commute

Key Assumption: Most jobs in city centre.

More suburban

areas

Impact on Residential

Easier commute

Key Assumption: Most jobs in city centre.

More suburban

areas

Impact on Residential

Easier commute

Bigger houses

Row house complex

Key Assumption: Most jobs in city centre.

More suburban

areas

Mix retail & Residential

Impact on Residential

Easier commute

Bigger houses

Row house complex

Key Assumption: Most jobs in city centre.

Impact on Residential: Suburbs

Space: Asset/Market:

Impact on Residential: Downtown

Space: Asset/Market:

Overall Housing Rent Impacts

Assumption:

Agricultural land not available for housing

• Increased demand for land = flattened line

• Increased land value due to reduced costs of transfer (K)

What toWatch ?

What to Watch

Increased Property value

suburbs

Lifestyle & Entertainment

areasLess Parking

The future is

here… Adapt.