Loan Officer | NMLS #341095
Branch NMLS #1647193
Posted On January 16, 2018
The modern cityscape is changing. With the growing popularity of moving to urban areas over the traditional suburban migration, American cities will look very different in as little as 5 to 10 years. Among the changes, MarketWatch contributor and commercial real estate CEO, Brian Watson, predicts a shift from retail to residential building, more recycled and repurposed spaces, and less of a need for parking.
As shopping shifts online, there will be less of a need for physical retail stores. This is already evident in the closures of former dominant department stores and other commercial properties. Future cities will be more reliant on delivery rather than shopping in actual stores, and commercial real estate is already starting to shift. Big retailers like Nordstrom, are testing smaller showroom spaces over the sprawling department stores of the past, giving patrons a chance to preview inventory, and then order on their own time online. Office spaces are starting to shrink also. From the 1990s to today, the average employee space has dropped from 400 square feet per person to less than 225 square feet. With more workers choosing to work remotely or in shared coworking spaces, the demand for urban office space has dropped.
Former retail centers like the malls of the past are being converted into residential apartments or shared residential and commercial spaces. Cities like Milwaukee and Los Angeles are repurposing unused shopping space to house more residents and stimulate community redevelopment. More seniors are also choosing to either return to or not leave urban city centers. Senior living facilities, like the Waterstone at the Circle in Boston or the Inspir in New York City, provide the health and home care seniors need, while still allowing them proximity to more social activities like dining, art shows, theater, and other interests and hobbies.
As self-driving cars continue to undergo testing and rideshare programs grow in popularity the need for parking decreases as well. Pioneers like Tesla, and historic automotive giants like General Motors, are all experimenting with autonomous vehicles. As technology continues to develop, cities will no longer need to be built around the car. With spaces like former commercial centers being successfully repurposed, large parking garages or parking lots could be next. Without the need to build and maintain parking for commuters, cities can reinvest in infrastructure like mass transportation and develop more mixed-used neighborhoods around transit centers.
As technology and migration trends change, cities nationwide will adapt. Among the top trends, real estate professionals expect to see more residential building, less commercial space, and less of a dependence on parking availability.