Infrastructure and readiness are on the minds of everyone lately, especially in the wake of recent disasters and crises around the country and around the globe. Mobility, nimbleness, and the ability to pivot are universal themes and relate to commercial real estate as we think harder about discrete implications. The 2016 Stanford Symposium with the Counselors of Real Estate touched on the future urban environment and how it will look and feel. Through schematics, plan and profile, for public ways including streets, sidewalks and green spaces the new city is more about infrastructure and public spaces than the private spaces. The panel focused on mobility including autonomous or self-driving vehicles and progress is being made daily through university research on the technology and the behavior. Vehicular right of ways, asphalt and otherwise, might give back up to 75% of the pavement. Commercial real estate is already impacted by dramatic shifts in mobility and in behavioral and demographic shifts by the users of commercial real estate. Trends like the increasing use of ride-sharing, electric vehicles, and two wheelers are already impacting demand for and design of parking, curbside pickups, mass transit and private shuttles, and traffic lanes and pedestrian ways. Not revolutionary or evolutionary, just more dramatically changing. Commercial real estate rents and prices are changing too to reflect a more holistic approach.
A recent panel on the ‘Real Estate and Economic Risks of Climate Change in Coastal Communities’ at Save the Bay in Providence, focused attentions hard on acknowledging changes to the natural environment and what it will necessarily mean for the build environment. Disaster readiness and preparation is further emphasized by the impacts of Harvey in Texas over this past weekend. Planners and developers have been rethinking and revising what makes sense for commercial real estate for over a decade, maybe longer. Boston has approved new CBD developments with substantial reductions in parking ratios and overall requirements and increased standards for building in coastal areas. Mixing real estate uses complicates the task. These trends are rendering outmoded and dysfunctional the traditional linkages both inside and outside the structures, but we’re starting to think harder about flexibility into the future. Technological innovation isn’t slowing down anytime soon and it’s making its way into every part of our lives.
Autonomous cars are a quantum leap to better mobility and traffic density and flow in cities and sprawling suburbs alike. Because this mode of transportation is still in beta and proto phases for at least a few more months, the impact is just reasonable conjecture. Testing on the pedestrian and driver reaction to self-driving cars is making headlines out of Virginia. The next phase in the effectiveness of the machines will be to gauge and predict behavior of the people. Before autonomous cars, roadways required or occupied 80% of the right of way with green space close to 0%; after autonomous cars, roadways will require or occupy 20% of the right of way with 42% of the right of way available for green space. The changes will be dramatic if not precisely, and it will force us to think about our infrastructure needs and wants in a different way.
Walking streets are several decades old in the US and ancient in Europe, and inform new developments and neighborhoods. Planners and developers had to visit and revisit European cities to see and watch how the traditional squares of cities and towns spilled at the edges for pedestrians, and central downtown boulevards could be closed for pedestrian, retail and entertainment. With Times Sq. in New York City now one of the most famous pedestrian spaces, mobility and accessibility has demonstrated an extraordinarily wide and flexible range of possibilities for public spaces.
Some improvements to accommodate changes in preparedness are nominal in cost and maintenance but make a major impact and dramatically reduce risk and future cost. Some are logically cost effective and can be accommodated. Some are significantly costly in construction and maintenance and some are significantly profitable for the property. All might enhance marketability and defer economic and functional obsolescence, and improve sustainability of the property. If the property is relevant and attractive for longer, the property is more sustainable and healthy, with benefits to share. When it comes to mobility, nimbleness, and sustainability, what’s good for the property is good for the users.
David Kirk, CRE, MAI, FRICS, is principal and founder of Kirk & Company, Real Estate Counselors, Boston.