The Transportation Revolution
Prepared for the 2017 ULI Fall Meeting
The coming revolution in transportation will be a game-changer for real estate. Ride-hailing (e.g., Uber) and driverless vehicles will combine to dramatically reduce transportation costs and time. A decline of vehicle ownership could cut parking needs in half within three decades. The 75 billion square feet of parking space to be eliminated is more than the U.S. apartment, office, mall, strip center, and industrial sectors combined. The impact on land values will be broadly deflationary. Because the transportation revolution’s impact on real estate doesn’t show up in underwriting today, many assets may already be mispriced. In most cases, the implications are asset specific. At the sector level, high-quality infill malls with densification opportunities should be the biggest beneficiary. Implications are likely unfavorable for self-storage, billboards, transit-oriented residential, and commoditized retail.