CBRE recently released results of its research into potential effects of autonomous vehicles that predicts the technology will disrupt more than just transportation. By disrupting the way employees commute to work, autonomous vehicles are expected to fundamentally reshape the U.S. office market by 2030, across nearly all property types and sectors, from retail, industrial, healthcare and hospitality to insurance markets and subsequent capital flows. Most significantly, 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.
“Autonomous vehicles may have the greatest impact on U.S. real estate markets since mass adoption of the car and expansion of the federal highway system,” says David Eisenberg, senior vice president of Digital Enablement & Technology at CBRE. “Ride-sharing services, which currently account for only about two percent of vehicle miles traveled in the U.S., have already had a major impact on transportation patterns, so even the conservative estimate of an 11 percent share of VMT will significantly disrupt employee mobility, and thus impact office markets, by 2030.”
By enabling employees to work, relax or sleep during their commutes, autonomous vehicles could increase the distance they are willing to travel to the office, giving occupiers a wider — and cheaper — range of geographic options when considering office locations. While this could create new investment opportunities for landlords in areas that are not currently accessible via public transportation, it increases the importance of the building itself. Says Andrea Cross, Americas head of office research with CBRE, “Occupiers already find highly amenitized buildings appealing, and while the exact timing for widespread adoption of autonomous vehicles remains uncertain, property differentiation is one element that landlords can control that will increase their buildings’ attractiveness now and in the future.”
In preparation for the onset of AVs, CBRE’s report outlines steps for office owners and occupiers to position themselves for the future now. These are to 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; and consider a broader geographic range of opportunities for office locations or investments.
If occupiers have a wider range of location options and employees find autonomous vehicles to 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 such as eScooters and bike sharing, which increase the distance someone without a car can cover, continue to be more prevalent.
