Driverless Cars vs Commercial Real Estate: What’s Coming Next
Jamie Mahoney
HOUSTON – (By Dale King, Realty News Report) – Autonomous vehicles are poised to reshape office buildings, warehouses and shopping centers.
In a new study titled “The New Industry Driver: How the Rise of Autonomous Vehicles Could Impact Future Real Estate Strategy,” researchers at Houston-based real estate firm Transwestern argue that the growing adoption of driverless cars, trucks and automated warehouse equipment could substantially affect every segment of the commercial real estate market.
The Transwestern report begins from a common premise: as autonomous vehicle (AV) technology spreads through ride-sharing and fleet services, personal car ownership may decline. If that scenario unfolds, the study outlines several likely changes to the built environment:
Less traffic congestion, which would free up curb and street space for pedestrian zones, outdoor dining, retail pop-ups and other public uses.
Reduced demand for parking, prompting cities and property owners to revisit parking requirements and consider redeveloping garages, surface lots and underground parking structures.
Increased use of public transit, as AVs complement first- and last-mile connections to transit hubs and allow employers to recruit from a broader geographic area.
Fewer driver-caused accidents, potentially easing demand on emergency rooms, trauma centers and rehabilitation facilities.
The study highlights concrete examples of how reduced parking needs can be reclaimed. In New York’s Times Square, a 270,000-square-foot pedestrian plaza and seating area was created as part of a “recapture project.” In Summit, New Jersey, the town partnered with a ride-hailing service to subsidize trips to the train station, minimizing the need for additional downtown parking.
Transwestern anticipates that office buildings will evolve in layout and amenity offerings. Of roughly 11 billion square feet of office space in the United States, about 2.5 billion square feet are in central business districts. As tenant expectations shift, building designs are likely to respond.
Adrianna Boursalian, a research associate and co-author of the report, suggested several emerging features. “Curbside pickup areas and ride-share lobbies could become standard amenities as tenants and visitors expect next-generation conveniences in Class A office buildings,” she said.
Retail property owners and mall developers should also pay attention. Many suburban shopping centers sit within extensive surface parking areas many times larger than the retail footprint. If those parking fields are no longer required, they become attractive sites for redevelopment, offering investors new possibilities for densification and mixed-use conversion.
Transwestern identifies the industrial sector as likely to experience the greatest disruption from AV technologies—particularly in warehouse automation, logistics and trucking. Approximately 70% of goods are transported by long-haul commercial trucks, and that share is expected to remain significant. The industry already faces a driver shortage; in 2015 an estimated shortfall of 48,000 drivers was reported.
Major manufacturers and technology firms have tested autonomous long-haul trucks. The report notes that companies such as Daimler and divisions of Uber have trialed self-driving truck operations, demonstrating potential for non-stop delivery on long routes. The degree to which logistics networks adopt autonomous trucks will affect industrial real estate demand and distribution patterns.
One pivotal question remains: will vehicle owners be willing to relinquish privately owned cars in favor of fleets of driverless vehicles? The report acknowledges concerns about safety, cybersecurity, regulation and consumer resistance, while emphasizing the scale of investment driving AV development.
“Billions of dollars from automakers, engineering firms and technology companies have accelerated AV progress,” said Jamie Mahoney, a research analyst in Transwestern’s San Francisco office and a co-author of the study. He added that while the timing of widespread adoption is uncertain, a disruption of this magnitude will have implications across office, industrial, retail and healthcare property sectors, and will create opportunities to unlock real estate value.
Mahoney emphasized that Transwestern’s primary focus is on real estate impacts rather than the underlying technology. The report incorporates findings from other research organizations, including RethinkX, an independent think tank that examines the speed and scale of technology-driven disruption.
In an interview with Realty News Report, Mahoney sought to temper fears of streets flooded with ownerless vehicles. He said the report’s conclusions remain relevant even if some external forecasts prove overly optimistic, and he noted that many personal vehicles sit unused roughly 95% of the time—an inefficiency that shared autonomous fleets could address.
