Urban Land Institute: Disruptive Technologies and Their Impact on Property Values
According to The Urban Land Institute:
In the near future, the real estate sector is likely to be disrupted by a host of technological advances ranging from artificial intelligence, driverless vehicles and the “internet of things,” to virtual reality (VR) applications that enable people thousands of miles apart to interact as if they were in the same room, according to a panel of experts at the 2016 ULI Fall Meeting in Dallas.
Dave Bragg, a managing director at Green Street Advisors, a research and analysis firm in Newport Beach, California, that tracks publicly traded real estate companies, said that the rise of driverless robotic vehicles could have a dramatic effect on the value of some properties.
The effects of this technology may change where people choose to live. In suburbs such as Summit, New Jersey, Bragg said, “people now pay a premium to live near transit hubs. But that could diminish if a person can take a five-minute driverless Uber ride cheaply, and easily get to the train station.”
With robotic vehicles making deliveries of everyday commodity products, properties with “low-value” retail businesses such as convenience and discount department stores will take a major hit, Bragg predicted.
Bragg also predicted that self-storage facilities will suffer, because people will be able to repurpose home garage space if they no longer own multiple cars. Other prognosticators have taken the opposite view, however, envisioning urban dwellers in micro apartments using former parking garages to store possessions that they don’t need on a daily basis—and perhaps even using robotic vehicles to fetch them for occasional use.
Bragg predicted that driverless vehicles actually could increase the value of office towers in central business districts, because it would be easier to commute to them. But conversely, he envisions suburban office parks decreasing significantly in value.
To view the full article from The Urban Land Institute, click here.