As alternative forms of transportation like ride-sharing and autonomous vehicles gather steam, experts say adjacent industries like commercial and residential parking are safe, at least for now.
According to Andrea Cross, Americas head of office research for CBRE, even in the face of technology and market disruptors like Uber and Lyft, demand for office tenant parking in particular will remain strong throughout the next five years.
In a survey conducted by CBRE, 75 percent of leasing professionals and office investors said that tenant demand for office parking will remain the same or increase through 2023. Part of the confidence is due to driving’s dominance amongst commuters in the U.S. — an overwhelming 86 percent of U.S. works use a car to commute to work, the report states. “The reality is that the vast majority of people still commute to work in a car,” said Cross.
Additionally, even despite interest and investment in autonomous vehicles continuing to expand — current players in the race include tech heavyweights like Google and Uber — most experts agree that fully autonomous vehicles are still as far as two decades away.
In a recent comprehensive study by international consultancy PricewaterhouseCoopers which outlines methods of alleviating traffic congestion, the timeline for mass adoption of autonomous vehicles is projected for closer to 2040.
Cross said that in New York City where traffic patterns are more complex and inclement weather is common — snow and ice creates a particular problem for the navigation AI — autonomous vehicles could take even longer to enter the market compared to other cities. “When you have a market like New York with a lot of pedestrians and bikers, it’s more difficult for vehicles to navigate that environment,” said Cross. “We don’t see autonomous vehicles [in New York] making an impact in the near-term.”
While the short-term projections for office and commercial parking remain stable, more distant outlooks are less certain. A November report by CBRE predicts that autonomous vehicles stand to “fundamentally reshape” office markets across the country. By 2030 the report states, autonomous vehicles could account for between 11 to 27 percent of all vehicle miles traveled, a bullish estimation on autonomous travel that mirrors an equally confident attitude.
David Eisenberg, senior vice president of Digital Enablement and Technology at CBRE said in a recent report that, “Autonomous vehicles may have the greatest impact on U.S. real estate markets since mass adoption of the car and expansion of the federal highway system.”
According to Cross, particularly in New York where commuters are less reliant on their cars, owners and developers in possession of often large and expensive parking garages and lots, flexibility is advisable. “From a development perspective it’s a difficult balance, because you have to have meet the needs of today and also look for tomorrow,” said Cross.
Among the strategies for outward looking office owners and developers who are unsure of the long-term future of parking is designing garages that can be adapted for alternate uses after the fact. Some owners have already begun building garages that are half above grade and half below, allowing them to raze the top half and build for an alternative use — residential or retail — if need be.
Other strategies, however, involve steering clear of garages and on-street parking altogether and replacing them with retail or other amenities. In New York City, several garages and parking lots have already been replaced throughout the last year, including a former parking garage on West 108th street being converted into a 280-unit apartment building and a NYCHA parking lot in Brownsville, Brooklyn slated to 101-unit affordable housing complex.
Not everyone is convinced that autonomous vehicles will have quite the same effect on the market, however. According to Christine Banning, President of the National Parking Association, even with trepidation over the future of parking, convertible garages have yet to gain large scale adoption. “There’s not a large trend towards adaptive design because of the cost of building the structures,” said Banning. “Many are postponing decisions around adaptive design until they see where autonomous vehicles are going.”
Banning also offered a more optimistic outlook on the impact of autonomous vehicles on parking, citing an increase demand for parking due to the adoption of private autonomous cars and the potential for urban areas to attract commuters from areas that formerly lacked easily accessible transportation.
Alan Lazowski, Chairman and CEO of LAZ Parking, said that the biggest factor in how much, or little, parking may be affected by an autonomous future could depend on what shape the technology takes. “One of the questions that’s still out there is when autonomous vehicles come, will it be more private or a fleet,” said Lazowski. “And that still has yet to be worked out; it’s an open question.”
Still, according to Lazowski, the future for parking will likely be reshaped by technology and changing preferences. Garages, he said, could be used as last-mile logistics hubs from which to launch speedy deliveries, or alternatively as for a more consolidated use like a mobility hub where travelers would be able to take multiple modes of transport.
Lazowski said that though autonomous vehicles will likely have an impact, projections are still just that — a guess. “[Some people have] this concept that no one will have ownership, and it will go into a pool or fleet type system,” said Lazowski. “It’s too early to know.”
Read the full story by James Pero here