Why real estate investors are watching self-driving cars closely

With decisions on real estate made years in advance, could self-driving cars change how we live?

Why real estate investors are watching self-driving cars closely

Bob Lutz is a former vice chairman and head of product development at General Motors. He also held senior executive positions with Ford, Chrysler, BMW and Opel.

In the Nov. 6, 2017 issue of Automotive News, Lutz forecasts the automotive industry on an accelerating change curve similar to the effect of the automobile on the horse a century ago

It’s getting a lot of attention in real estate circles.

As Uber and Lyft scoot us around town, they and others are gathering detailed data points that will lead to driverless vehicles being able to operate on our road grid with great precision, efficiency and safety. Blending mapping technology with that data is accelerating the process of getting us into driverless vehicles sooner than we think, Lutz contends.

The effect of a driverless vehicle future on the auto industry has big implications on real estate as well.

“Most of these standardized modules will be purchased and owned by the Ubers and Lyfts and God knows what other companies that will enter the transportation business in the future,” says Lutz.

Retail auto sales will be a thing of the past in 20 years, he predicts, and every form of retail support services such as gas stations, auto repair shops, auto parts stores, and quick oil change locations will be obsolete as well. They will be located where the winners in this race want them to be.

When this all might happen is up for debate. But in real estate, bets are long term in nature and an industry change of that magnitude in even 30 years has wide-ranging impacts on values and financing options even in the next 10 years, begging the ultimate real estate question around current uses — what their highest and best use can or should be in the future.

Will single-family homes see more demand further out from the employment centers because commutes are now predictably shorter?

Could some of today’s auto retailer sites be converted to fueling, repair and pooling stations for these fleet owners instead of retail sales locations?

Are there other retail uses for auto parts stores and service stations where they are located today? What happens to retail generally, and is road signage even necessary if my phone and autonomous vehicle are synced up and flagging everything I’m passing? Is there a role for light rail at all?

Real estate investors are just beginning to examine this sea change ahead and asking these questions in anticipation.

Tom Hoban is CEO of The Coast Group of Companies. Contact him at 425-339-3638, or tomhoban@coastmgt.com or visit www.coastmgt.com. Twitter: @Tom_P_Hoban.

Talk to us

More in Herald Business Journal

Supporters march Wednesday afternoon across from Providence Medical Center in Everett on May 5, 2021. (Kevin Clark / The Herald)
Everett nurses threaten to strike as contract talks stall

Union leaders say Providence’s latest offer includes low wages and cuts to benefits and paid leave.

Pho
You voted: The best pho in Snohomish County

Even during a pandemic, people still have their favorites

Mukilteo’s Diamond Knot Brewery & Alehouse before the state made them remove the six tables for outside dining because the sidewalk is on park property. (Diamond Knot)
State: No more drinking beer on the sidewalk at Diamond Knot

The Mukilteo alehouse had to remove six picnic tables that were on park property, which abuts the building.

Exterior of the new Quil Ceda Creek Casino on Thursday, Jan. 21, 2020 in Marysville, Wa. (Olivia Vanni / The Herald)
Gambling Commission OKs pacts with tribes for sports betting

Agreements with the Tulalips, Stillaguamish and 13 other tribes await approval by the governor and the feds.

Snohomish roofing company fined $1.2M for safety violations

State inspectors noted a dozen “willful serious violations.” Allways Roofing says it will appeal.

Bothell man sentenced for illegally trading Amazon stock

He got confidential information from his wife, who was an Amazon finance employee at the time.

A Boeing 737 Max taxis after landing during a test flight in Seattle on Sept. 30, 2020. MUST CREDIT: Bloomberg photo by Chona Kasinger.
United Airlines in talks to buy at least 100 Boeing Max jets

To attract orders for the plane, Boeing has been offering some customers steep discounts.

Couple sitting in summer cafe outdoor scene. Restaurant outside with table under umbrella vector illustration. Young man and woman eating and drinking, waiter coming with drinks.
You voted: The best patio in Snohomish County

During the pandemic, outdoor seating has become quite popular.

Paul Dolan
Everett’s Aviation Technical Services welcomes a new CEO

The airplane repair company president will step into his role at a critical moment for the aerospace industry.

Boeing workers walk outside of Boeing's Everett assembly plant on Tuesday, April 21, 2020 in Everett, Wa. (Olivia Vanni / The Herald)
Boeing jet sales surge as pandemic retreats in U.S., Europe

Deliveries remain an issue due to problems in factories and increased scrutiny from U.S. regulators.

Two vector oysters in shells isolated on a white background
You voted: The best oysters in Snohomish County

Even during a pandemic, people still have their favorites.

FILE - This undated illustration provided by Blue Origin shows the capsule that the company aims to take tourists into space. Jeff Bezos' rocket company is already calling its future clients "astronauts." One seat is up for grabs on the New Shepard rocket's debut passenger flight scheduled for July 2021; an online auction is underway. (Blue Origin via AP)
Bezos plans to go to space aboard Blue Origin flight in July

He, his brother, and the winner of an auction, will be aboard the New Shepard spacecraft on July 20.