The Impact of Automation Connected Vehicles and Smart

The Impact of Automation, Connected Vehicles and Smart Technologies on Commercial Real Estate Wes Guckert, PTP President & CEO

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Moving FAST! Disruption and transformation of cities will be enormous!

HOWEVER - Complete adoption not until 30 years from now

Uncertainty is HIGH plus issues hacking, ethical, responsibility…?

Constant jay walking stopping AVs

Self-Driving & Connected Vehicles Impact on Cities & Municipalities

Substantial reduction of revenue for municipalities • DUI • Speeding • Red Light Running

• Demand for TODs may reduce • Demand for suburban residences could increase – Better schools – Expectation of safety in the suburbs

Less expensive properties w/o transit may become more valuable

Existing infrastructure vs NEW – better use of roads without widening

Long commutes easier in rural areas

Substantial reduction in pedestrian and auto accidents

Video Removed Hands waiving out of a sunroof of a car while it’s driving a twisty road.

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256 Million Cars Registered Roads and parking consume 40% of the urban land area

At least 4 spots for EVERY CAR in the U. S. 1 Billion spaces

Imagine… fewer cars with self-driving

75 Billion SF of space to become available!

The impact on land values is COULD be deflationary

Some Commodity retail will suffer… grocery stores, etc. Depends on area served

Micro deliveries using AVs groceries <60 minutes

Today…cars sit 95% of the time

Cheaper to pay for time you ACTUALLY USE!

Now $0. 75 $0. 15 - $0. 30 with self-driving/ride-hailing

Utilization rate of cars can go… with self-driving cars

2015 30% Utilization Uber Las Vegas NOW 60 -70% Utilization

IMPACTS OF TNCs NOW Taxi Rides DOWN 60% Bus Rides DOWN 15% Parking $$ FLAT Remote Park DOWN 50% Congestion, also NYC Curb space issues Drop off safety

Rid e BUSINESS TRAVELERS Hai ling

In S. F. trips in SOVs dropping dramatically So far ONLY 15% of all adults have used ridehailing services

By 2021, North America alone – projected 6 million TNC drivers

Started in 2012 4 years later… 14 Million rides MONTHLY!

Investments in TNCs 2015 2014 2013 $500 Million $ 5. 6 BILLION $ 11. 5 BILLION

With the exception of a driver, this could be an AV in the future

Dateline: Las Vegas Another 12 -15 passenger self-driving bus

Now a FLEET of AVs provides access to jobs, school, shopping --- at a fraction of the cost of owning a car

New Mobility Options for… New mobility options for… Blind Physically challenged Elderly School Children Car Pooling

Garage Design Discussion NOW 8 ft. – 10 ft. clear height INCREASE to 17 ft. – 18 ft. for repurposing

9 ft. – 10 ft. spaces down to 7 ft. – 7. 5 ft. another 20% in land savings

With self parking cars

RESULT =Cost of urban construction could drop by 10% - 20% Could encourage more development

Summary of IMPACT on Real Estate Please pay attention if you own commercial property!

You “get” VALUE created by reduced NEED for parking spaces!

Think about the impact of 50% fewer parking spaces – how you would use that land

• A 1 million sf center with 5. 0 parking ratio - 5000 spaces • Now reduce the parking by 50% or 2500 spaces • frees up 30 acres of land- IMPACT @ 5 Cap Rate !!

High quality malls – winners!

A E R A L MAL S O O T Insure longer Drop-Off areas for car sharing – Uber, Lyft, etc.

Similar to this example, Westfield is going to triple or quadruple the Drop-Off space

Insurance Auto Parts Hotels Airlines

Mobility Drivers Public Transportation Energy & Petroleum Parking Garages /Lots

Office Space Car Manufacturing

Of course, self-driving long-haul trucks will be able to deliver goods all hours of the night …a POSITIVE IMPACT on cities

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Amount of smaller spaces – dwindling i. e. 35 miles I-95 N. of Baltimore – little space available

Ramp up for trucks to 2 nd level

Tractor Trailers can access each Level- Japan

Empty Stores will be used for small, close in distribution hubs.

RETHINK EVERYTHING!

• People need to be able to get in and out of cars. • Curb space in urban environments will be in high demand. • Basic improvements will be needed to upgrade road systems.

• Buy LOTS of paint! - curbs, lane markers, and signage will need changes to bring on an autonomous future. • Decisions about parking will have great ramifications in terms of how we use land. • Urban planning and transportation cannot be divorced anymore.

“Uber yourself before you get Kodaked!”

www. trafficgroup. com wguckert@trafficgroup. com @Wes_Guckert