The Future of Parking Lots & Commercial Real Estate

parking-lot-300x200When reading the latest news about smart city technology and future trends, it’s easy to get overwhelmed. So many guesses, predictions and reports to sift through – is it all just noise?Sure, most of it likely is. But as Michigan’s own Nate Silver reminds us, there are sometimes signals buried in the noise. For me, a recent piece of news rang out like piercing siren: former Uber CEO Travis Kalanick is investing $150 million in a real estate company and taking over as its CEO. Now, Kalanick’s name elicits all sorts of emotional reactions, for good reason. But set those aside for the moment and examine this, on its face unremarkable, business headline more closely. Where does Kalanick’s new company primarily focus? “Distressed real estate assets like parking lots or abandoned strip malls.” Assets that, in Kalanick’s words, “…will need to be repurposed for the digital era in the coming years.”

Kalanick made billions seeing the future of transportation, at least a piece of it. His former company’s name is now a verb. Now he’s placing a significant bet on the changes that are coming to our communities, partly as a result of his former company. Much of the land of cities is tied up in single-use commercial development (much of it low-quality) and parking lots/structures. Some combination of online retail, convenient delivery, ride-sharing and autonomous vehicles are threatening to render those two uses obsolete.

You’ll hear many who have an interest in the status quo dismiss these future scenarios as unlikely or too distant to worry about. This piece of news said to me that Kalanick thinks otherwise. Community leaders should heed this signal and start to consider what happens if large chunks of the land in their downtowns and commercial districts become available. Because when real estate changes happen, they tend to happen in waves.