By disrupting the way employees commute to work, autonomous vehicles are expected to fundamentally reshape the U.S. office market by 2030, according to a report from CBRE. Most significant, the primacy of commercial real estate’s traditional decision drivers — geographic location and access to talent — may decrease as the importance placed on the workplace experience and building amenities grows.
Based on extensive and proprietary research, including interviews with leading experts in the autonomous-vehicle space, CBRE’s report predicts autonomous vehicles could account for between 11 percent and 27 percent of vehicle miles traveled by 2030. Factors considered in CBRE’s analysis include the rate at which the cost per mile for self-driving cars decreases compared with personal cars; the time it takes to develop software capable of navigating both inclement weather and complex urban roadway layouts; and advances in vehicle manufacturing capacity.
By enabling employees to work, relax or sleep during their commutes, autonomous vehicles could increase the distance people are willing to travel to the office, giving occupiers a wider, and cheaper, range of geographic options when considering office locations. This could create new investment opportunities for landlords in areas that are not currently accessible via public transportation, such as the California suburbs east of Oakland and in the Inland Empire, says the report.
If occupiers have a wider range of location options and employees find autonomous vehicles make for a more enjoyable commute than public transportation, proximity to commercial centers and public transit could become less critical when it comes to attracting top talent. Conversely, demand for properties in locations that have “live, work, play” walkability will remain strong, particularly as micro-mobility options — e-Scooters, bike sharing and other alternatives that increase the distance someone without a car can cover — continue to be more prevalent.
In preparation for the onset of autonomous vehicles, CBRE’s report outlines steps office owners and occupiers can take to position themselves for the future, now:
- Focus on creating the most attractive building and work environment possible
- Replace parking lots, garages and on-street parking with amenities and urban retail
- Target walkable areas
- Consider a broader geographic range of opportunities for office locations or investments
Andrea Cross, Americas head of office research for CBRE, concludes: “The impact of [autonomous vehicles] will be felt across nearly all property types and sectors, from retail, industrial, healthcare and hospitality, to insurance markets and subsequent capital flows.”
Mike Consol (firstname.lastname@example.org) is editor of Real Assets Adviser. Follow him on Twitter @mikeconsol to read his latest postings.