How GM’s New Autonomous Car Will Impact Retail Real Estate
New autonomous cars could be hitting the roads faster and at a far greater scale than most expect. What impact will it have on how we live, retail real estate, and investments in commercial property?
General Motors has revealed its new car, which is fully autonomous, and doesn’t even come with a steering wheel or pedals, and is slated for production in 2019. Other brands have been working on their own models, but this may be the first with no steering wheel to be produced at scale. How might it change the world we live in?
More Uber, Fewer Garages at Home
GM’s new vehicle is positioned as an Uber type vehicle, that will take users where they want to go. That means less need for garages and driveways at home. That in turn can be very useful for developers of mixed use complexes who don’t need to incorporate parking space. This is already happening in some new developments. They can get more out of the land.
Less Parking Space at the Mall
We’ll also need less parking space at our retail plazas and malls. Automated ride services will pick up users from home and drop off and pick up shoppers. That means more buildable space at these commercial properties, which have sometimes seen the bulk of their footprints taken up by parking versus leasable retail space. With more leasable space to develop and rent, returns for investors in these properties, and their value will only rise.
More Appealing to Go to the Shopping Center
With low cost, automated vehicles it may be a lot easier and less stressful to head out to local shopping centers. You can get dropped off at the door, without the hassle of trying to park, or lug your shopping through the parking lot or rain. That could help increase store traffic, and in turn; retail revenue.
Big Savings & Extra Spendable Cash
A car is one of the biggest expenses individuals and families have. Many currently have more than one. With no need for a car/s at home, that means saving all the expense of buying one, gas, maintenance, insurance, etc. That’s all more money to spend at the mall, further increasing profitability of retail property landlords.
It may be another year or two before we really see this in action at mass, but it is coming. This could make many retail properties far more valuable and profitable in a very short period of time. Those who invest ahead of the pivot, are likely to see the largest leaps in capital and yield growth.