Commercial real estate is an important aspect of any city or town, and the methods by which it is bought and sold have not changed in some time. But how it is being developed, how new land is used, and how older structures are being repurposed are all changing. Among the potential catalysts for changes down the road are driverless cars and ride sharing, which may affect both how people move through a city and where they stop within that area. People may soon be ditching their cars, especially in larger cities where there is public transportation and other options, and that means empty parking spaces and abandoned parking garages. What should be done with these, and how will those empty home garages affect the storage industry
Parking garages are a great way to give people plenty of places to put their vehicles when they shop and move around a city, but they are also expensive. Now that there is more ride sharing in a number of cities, people don’t need parking garages as much. They are ditching their cars entirely in some cases, and in other cases, they just don’t drive them as much as they used to. As a result, some parking garages are sitting empty or mostly empty. The ones that are half-used could be consolidated, but what happens to the empty ones? Commercial real estate opportunities may arise from repurposing them in new and interesting ways.
One option is to turn them into office buildings and retail space if the distance between floors is correct. If not, they may be changed into distribution centers and warehouse space for local companies or online companies that need more shipping and storage space for their goods. That changes the game for commercial real estate, because fewer new buildings may be needed.
Storage units and the companies that operate storage facilities may also struggle with the changes. That’s because fewer cars in people’s garages means those people have more storage space in their homes. They may not need storage facilities, so an entire industry could suffer. It’s still possible that areas will exist in which owning a vehicle will be more convenient than using public transportation. There are a huge number of storage facilities around the country today, and if they begin to become unused they may be able to be repurposed just like parking garages. That adds to the number of buildings that may sit empty until they find a buyer who wants to change them around to fit what they need. The pool of buyers who want to do this is generally smaller than the pool of buyers who is looking for buildings that will already meet their needs.
People may be able to travel differently than they did before in a world with driverless cars. With each driverless car that makes it onto the road, a person who uses that car may just be taken to and from a particular location on their designated route. That can keep them from impulse stopping at other businesses along that route, which means they may avoid some of the commercial businesses that would have otherwise seen them as a customer. That will also affect how well commercial real estate does in that location and will add to the level of struggle that businesses and other commercial operations face.
Now, will any of these changes happen overnight? Probably not. However, investors should always keep an eye on any technology that threatens to shake things up. Changing times can be handled successfully, but they do call for changing ideas. Never assume things will stay the same forever.