Market forecast

Shifting Landscape

Changes in transportation are poised to transform commercial real estate.

The transportation industry stands on the cusp of a remarkable evolution involving the deployment of many technologies that promise to revolutionize how people move about and potentially use land to support those technologies. Vehicles will communicate to one another through vehicle-to-vehicle connectivity and vehicle-to-vehicle infrastructure.

That will facilitate communication of safety issues, such as accidents ahead and near-collision circumstances. Connected commercial freight vehicles will platoon to maneuver as a chain of trucks, drafting behind one another to create fuel savings.

Vehicles also will become more and more automated, relieving the driver of many duties, such as imminent hazard braking and lane choices. Potentially, these vehicles will be driverless.  

The increased mobility anticipated by implementing autonomous vehicles creates many possibilities. 

Until user patterns and preferences emerge and stabilize, the related effects on commercial real estate development are tough to predict. Nonetheless, the ramifications are  potentially dramatic. Three broad real estate trends and their potential changes may reasonably arise from adopting autonomous vehicles.

Urban Development

Historically, urban development has followed the location of transportation centers and corridors. Implementing autonomous vehicles, however, could reduce dependency on traditional public transit.

People may possess greater ability to live and work wherever they like. The need for city or commercial centers also might be reduced, causing suburbs and other traditional residential properties to increase in popularity.

Residential areas may be more accessible to work locations with the availability of autonomous vehicles, either used alone or in conjunction with transit. Additionally, with less need for parking, pedestrian areas may increase. Parking lots may turn into infill buildings.

Building Design

Both residential and commercial buildings will dedicate far less space to parking. With less parking required, some developers may elect to simply reduce the size and cost of buildings. Other developers, however, might prefer to increase the amount of space used for other purposes.

Since parking in buildings can be particularly expensive to construct, capital might be reallocated to enhance revenue-generating aspects of a building.

Commercial buildings will need greatly enlarged areas for passenger drop-off and pickup, allowing for orderly entering and exiting during times of high-volume use. Deliveries may occur on a just-in-time basis, changing the loading dock and other support facilities.


The location and nature of parking facilities will necessarily change. Autonomous vehicles need short-term parking spaces between uses, likely in the vicinity of those areas that the vehicle patrols.

Long-term parking also will be needed, but is more likely at satellite locations. Also, extensive smart infrastructure will be required to support the use of autonomous vehicles.

The design of such infrastructure is well underway. The development of certain standards and criteria also is progressing to allow for the interoperability of vehicles over long-distance trips and their safe operation in congested areas.

New Investment Opportunities

Real estate investors may find opportunities coming from these possibilities. Examples include:

  • Roadside property may be needed for vehicle-to-vehicle infrastructure technology.
  • Commercial freight companies may need platooning centers, where vehicles are organized in efficient platoons based on destination and size to maximize fuel savings.
  • Ride-hailing fleets may need inventory centers to store driverless cars while they are not in use.
  • Both platooning centers and ride-hailing fleets will need service centers for maintenance of their specialized technologies.
  • Vehicle testing centers will be needed in more locations than currently planned.

Autonomous vehicles represent a new paradigm in transportation, providing opportunities for commercial real estate development and economic growth. Strategically minded developers might start planning now to better understand potential issues pertaining to land use and the built environment. Both current holdings and land speculation should be considered, particularly those near dense urban centers.

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William J. Kohler and Ross J. Altman

William J. Kohler is a senior counsel with the national law firm Dykema Gossett PLLC in Detroit. Contact him at Ross J. Altman is a member with the national law firm Dykema  Gossett PLLC in Chicago. Contact him at

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