Norm Miller

|

SAN DIEGO—Parkinggarages and roads may change to include conversion of parkingspaces to usable real estate and the addition of drop-off lanes,along with a variety of other possibilities, once autonomous vehicles become commonly used,Norm Miller, Hahn chair of real estate financeat the Burnham-Moores Center for Real Estate atthe University of San Diego School of Business,tells GlobeSt.com. Miller recently wrote an article about theimplications of autonomous vehicles on real estate andinfrastructure. We sat down with him for a chat about the deeperimplications of this technological disruption for our industry.

|

At the time of our interview, Miller said he'd been at anational conference where the topic of autonomous vehicles' impacton the real estate industry came up a few times. “One of theproblems that we have is that even though autonomous vehicles mayallow us to shift parking to less expensive areas, regulations forbuilding require extensive parking: the requirements are 1.5 spacesfor a two-bedroom unit here, and that's typical throughout thecountry. This adds greatly to construction costs for multifamilyand condos.”

|

The question is when will governments allow this to be pushedback in anticipation of autonomous vehicles, Miller says. Theconsensus seems to be that these vehicles will become commonplacewithin the next decade; within five years, the technology will behere, but regulations would slow it down, with some municipalitiespermitting it and some not. He said the belief is that changingparking regulations is a long way off, “but it could have atremendous impact on lowering the cost of building apartments ormore affordable homes. That's a huge positive. That's the onebiggest personal impact that affects everybody.”

|

Another sector of the industry that will be greatly affected byautonomous vehicles is the retail arena. Theaverage person he spoke with on the editorial board of a recentconference is 50 years old and currently receives an average of twopackages per week from Amazon, whereas 10 yearsago they received two packages per month from Amazon. “Nobody thereis investing in traditional retail or big boxes—there is zeroallocation to that. Everybody is investing in industrial.”

|

Within the industrial realm, cost savings fromautonomous vehicles will be realized in the fact that, withdriver-assisted trucks, truck drivers will be able to go longdistances; trucking is a big component of industrial costs.“Distribution costs should become more efficient,” says Miller. “Inthe short run, three to five years, trucking companies thatimplemented such systems—if they could get approval forlong-distance driving—will make more money. Conversely, in 10years, the cost of shipping things should come down, making Amazonmore competitive.”

|

In terms of office, there should be somebenefit since developers don't need to build as much parking, saysMiller. “But when you build an office building, above-groundparking is built on a slant—that will change with autonomousvehicles. In the future, we will build garages withfloor-to-ceiling flat floors and ramps at the edges of giantfloorplates that go up and down. The building will be moreproductive by converting two or three stories of that space tooffice or residential space rather thanparking.”

|

Nobody's exactly sure how autonomous vehicles will affectleasing “Looking at it by sector, the big question is when we moveto more autonomous vehicles will we also move to a model wherefewer people own cars?” says Miller. “If fewer people own cars,will you be renting Uber or Lift-type cars? If that happens, youdon't need to build garages as much. And what about existinginfrastructure like gas stations and driveways?Will these become shared parking spaces? There will likely be awhole lot more sharing.”

|

It's also hard to say how investment will be affected byautonomous vehicles, “but you don't want properties that areobsolete,” says Miller. “Autonomous vehicles mean certain propertytypes are not going to fare well, like big boxes. Traffic will notalways be less. Cars will all be electric eventually, so emissionswill not be great. I predict a carbon tax on non-efficient cars.The market will eventually demand cleaner air. Fossil fuels willnot be competitive with batteries in electric cars, so there won'tbe as much of an environmental concern.”

|

Miller adds that infrastructure design willalso need to adapt. “We will probably have to redesign roads aroundoffice buildings and convention centers—they will need drop-offlanes. Roads will have to be redesigned with more drop-off lanes onthe fringes. It's hard to change, but maybe we'll do it bystacking.”

|

Norm Miller

|

SAN DIEGO—Parkinggarages and roads may change to include conversion of parkingspaces to usable real estate and the addition of drop-off lanes,along with a variety of other possibilities, once autonomous vehicles become commonly used,Norm Miller, Hahn chair of real estate financeat the Burnham-Moores Center for Real Estate atthe University of San Diego School of Business,tells GlobeSt.com. Miller recently wrote an article about theimplications of autonomous vehicles on real estate andinfrastructure. We sat down with him for a chat about the deeperimplications of this technological disruption for our industry.

|

At the time of our interview, Miller said he'd been at anational conference where the topic of autonomous vehicles' impacton the real estate industry came up a few times. “One of theproblems that we have is that even though autonomous vehicles mayallow us to shift parking to less expensive areas, regulations forbuilding require extensive parking: the requirements are 1.5 spacesfor a two-bedroom unit here, and that's typical throughout thecountry. This adds greatly to construction costs for multifamilyand condos.”

|

The question is when will governments allow this to be pushedback in anticipation of autonomous vehicles, Miller says. Theconsensus seems to be that these vehicles will become commonplacewithin the next decade; within five years, the technology will behere, but regulations would slow it down, with some municipalitiespermitting it and some not. He said the belief is that changingparking regulations is a long way off, “but it could have atremendous impact on lowering the cost of building apartments ormore affordable homes. That's a huge positive. That's the onebiggest personal impact that affects everybody.”

|

Another sector of the industry that will be greatly affected byautonomous vehicles is the retail arena. Theaverage person he spoke with on the editorial board of a recentconference is 50 years old and currently receives an average of twopackages per week from Amazon, whereas 10 yearsago they received two packages per month from Amazon. “Nobody thereis investing in traditional retail or big boxes—there is zeroallocation to that. Everybody is investing in industrial.”

|

Within the industrial realm, cost savings fromautonomous vehicles will be realized in the fact that, withdriver-assisted trucks, truck drivers will be able to go longdistances; trucking is a big component of industrial costs.“Distribution costs should become more efficient,” says Miller. “Inthe short run, three to five years, trucking companies thatimplemented such systems—if they could get approval forlong-distance driving—will make more money. Conversely, in 10years, the cost of shipping things should come down, making Amazonmore competitive.”

|

In terms of office, there should be somebenefit since developers don't need to build as much parking, saysMiller. “But when you build an office building, above-groundparking is built on a slant—that will change with autonomousvehicles. In the future, we will build garages withfloor-to-ceiling flat floors and ramps at the edges of giantfloorplates that go up and down. The building will be moreproductive by converting two or three stories of that space tooffice or residential space rather thanparking.”

|

Nobody's exactly sure how autonomous vehicles will affectleasing “Looking at it by sector, the big question is when we moveto more autonomous vehicles will we also move to a model wherefewer people own cars?” says Miller. “If fewer people own cars,will you be renting Uber or Lift-type cars? If that happens, youdon't need to build garages as much. And what about existinginfrastructure like gas stations and driveways?Will these become shared parking spaces? There will likely be awhole lot more sharing.”

|

It's also hard to say how investment will be affected byautonomous vehicles, “but you don't want properties that areobsolete,” says Miller. “Autonomous vehicles mean certain propertytypes are not going to fare well, like big boxes. Traffic will notalways be less. Cars will all be electric eventually, so emissionswill not be great. I predict a carbon tax on non-efficient cars.The market will eventually demand cleaner air. Fossil fuels willnot be competitive with batteries in electric cars, so there won'tbe as much of an environmental concern.”

|

Miller adds that infrastructure design willalso need to adapt. “We will probably have to redesign roads aroundoffice buildings and convention centers—they will need drop-offlanes. Roads will have to be redesigned with more drop-off lanes onthe fringes. It's hard to change, but maybe we'll do it bystacking.”

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Carrie Rossenfeld

Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.

carrierossenfeld

Just another ALM site