February 6, 2019
Cushman & Wakefield’s latest report in the firm’s “Tech Disruptor Series,” identified existing and emerging trends in the technology industry that are primed to reshape commercial real estate. Consumer behavior is changing, and that’s playing out across CRE marketplaces with increasing frequency. Still, the report notes widespread adoption is at least a decade or two away with many obstacles, encompassing regulatory, environmental, overall travel demand and legal.
Cushman & Wakefield’s Revathi Greenwood says, “As transportation companies continue to innovate, consumer behavior is changing and a key question is how this affects commercial real estate.”
Transformations in manufacturing facilities, office spaces, parking, and gas stations, are just a few examples of how commercial real estate will need to adapt to the changing landscape of transportation, notes Greenwood. “As urban commuters are spoilt for choice, with options from public transportation to ride-sharing, e-scooters, autonomous vehicles and electric vehicles, commercial real estate participants must be ahead of the curve to determine these changes and react accordingly,” she says.
Among the key report findings:
– Technology is being adopted in industrial logistics and manufacturing settings
– Private car ownership will survive for now, though ride-sharing frees up considerable space to be repurposed or risk becoming obsolete
– Markets will experience an explosion in demand from data centers, cloud computing, entertainment content, high-tech manufacturing, cybersecurity and original equipment manufacturers (OEM)
– Technologies provide more location flexibility, but location will still matter
– There’s a potential to erode premiums for TOD sites and projects
– Large, wealthy, densely-populated cities with expensive parking are likely to be the “early adopters”
Cushman & Wakefield advises CRE owners to look at how to combine constants, including the need for talent, innovation centers, building amenities, along with data, flexibility and efficiencies. Occupiers still want talent, and talent flocks to large, dynamic urban cities driving change and creating jobs.
Building-level soft amenities, services and technologies that straddle hospitality services, as well as data collection from buildings and occupiers (via surveys) are smart bets under any scenario. CRE players who focus on flexibility and efficiencies, while positioning assets to adapt to mobility changes, are best placed to outperform their competitors, predicts Cushman & Wakefield.
For comments, questions or concerns, please contact Dennis Kaiser