In the latest edition of our monthly news brief, JLL’s regional team curates the top commercial real estate industry articles to keep you in-the-know. In this month’s edition, JLL spotlights drones’ impact on CRE, how autonomous vehicles will reshape cities, and how several local markets are creating a more ‘walkable’ downtown.
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Drone Technology Takes Off in CRE, Creates New Opportunities and Challenges
Much like virtual reality (VR), drone technology has created new opportunities within the commercial real estate industry to streamline the transaction process.
Drones are unmanned aerial vehicles flown autonomously, and are used in a number of industries, including commercial real estate. How? With drone technology, prospective clients can view aerial property photographs or recorded video. This can help clients and investors determine the potential assets and challenges of a property. The end result is a faster transaction process, as clients have access to more property information than ever before.
One of the biggest challenges associated with drone technology, however, is current legal regulation. Commercial drone users often face difficulties determining who owns the airspace in which the drone is flying over. Similarly, the Federal Aviation Administration (FAA) ruled that operators of commercial drones must obtain a waiver for those participating and comply with a number of other regulations.
Autonomous Vehicles Drive Major Changes in U.S. Cities
In more tech news, the growing popularity of autonomous vehicles, or self-driving cars, is reshaping U.S. cities and daily routines. Cities like Columbus and Pittsburgh are not only experimenting with the new technology, but are embracing it with open arms.
With autonomous vehicles, daily commuters could have a new workspace, boosting productivity by giving back nearly 50 minutes of their day in transit. For some, autonomous vehicles present an opportunity for improved work-life balance and flexibility. Autonomous vehicles also eliminate the need for parking spaces throughout central business districts (CBDs), creating more potential commercial space, or room for parks and green space.
Overall, timing pairs well as the millennial workforce searches for downtown living space—and autonomous vehicles are poised to improve the livability of cities.
How Local Regions Are Creating ‘Walkable’ Downtowns
Research from the Urban Land Institute found that nearly 50% of people take into account the walkability and proximity to destinations a high priority when choosing where to live. Likewise, the millennial generation—now the largest population in the American workforce—expresses interest in working in an urban area within close proximity to restaurants, entertainment, and a mix of other activities.
Cities and surrounding submarkets are recognizing this trend and are making strides to accommodate. For instance, it was recently announced that Cincinnati’s Over-the-Rhine neighborhood would look into adjusting traffic patterns to improve the streetscape and walkability to entertainment venues.
Both Cleveland and Detroit are also in talks of bringing more walkable residential and green space to attract millennials who are looking to work and live downtown. Both cities have been thriving, recently, with interest from both millennials and the Baby Boomer generation to live, work and play downtown.
Cleveland has a number of projects in the pipeline, including a bicycle track down the center lanes of some of the city’s main streets, and the possibility of a ‘Greenway Corridor’ to connect Cleveland’s uptown and downtown areas. Both potential projects focus on connecting areas of downtown with trails, pathways, sidewalks and bicycle tracks.
Detroit’s Troy community is also working on a development plan for a 127-acre civic campus, which would include residential space and walkable retail pathways to the city. The community hopes to model the area after other successful communities like Royal Oak, Birmingham and others with walkable neighborhoods.
CRE News Wrap-Up in Our Region
- Some of the region’s biggest 2017 real estate projects include the redevelopment of Blue Ash’s airport land and reshaping the gateway to Walnut Hills and Eden Park. While some details are still to be determined, many of the incoming developments are expected to create new jobs and widen the area’s talent pool.
- Street Corner is leasing 1,500 square feet of space at The Banks. After attempts to bring a market to the Banks, retail planners announced that the convenience store and deli will open its doors this spring.
- A total of 7.7 acres and eight buildings along the Flats have been sold to a Cleveland-based investor for $3.5 million. Investors are considering new construction as well as the restoration of existing buildings onsite.
- Newly signed legislation by Ohio Governor John Kasich will allow for the renovation of two Northeast Ohio buildings. The May Company building in Cleveland would receive $25 million, and the former Goodyear headquarters in Akron—slated for contemporary office space—would receive nearly $19 million.
- The Federal Railroad Administration has approved a $350,000 preliminary engineering study for a potential high-speed passenger train between Columbus and Chicago. The train, intended to increase mobility between the two cities, would travel up to 110 mph to take passengers between the cities in less than four hours.
- The City of Columbus named three finalists to develop the North Market parking lot. Proposals from the three finalists include a large towers made up of office space, residential space, or a mix of both.
- Detroit’s downtown office vacancy has dipped to its lowest point in at least a decade, with vacancy rates hitting 13.3%. Because of this, many building owners are optimistic that the occupancy rate in and around the city will continue to improve following the delivery of the QLine streetcar.
- The Michigan Strategic Fund approved a $30.9 million investment in The Woodward @ Midtown development. Along with residential space, the development will include both retail and commercial space.
- Maplegrove Property Management will begin the steel framework of its residential development behind Founders Brewing Company this month. The development includes a 235-unit apartment building and 30,000 square feet of retail space, to be completed in June 2018.
- A new Hilton Garden Inn hotel is set to open this spring along the East Beltline in Grand Rapids. The 144-room hotel will be delivered in time before the State Games of America begin in the region.
- Edison Electric, LLC, signed a lease for the newly renovated space at the Old Walnut Street Development. The 110,000-square-foot commercial space includes an 8,000-square-foot conference center.
- The River Ridge Development Authority approved a number of contracts for construction and infrastructure improvements to the River Ridge Commerce Center, including construction of a lift station and the gateway phase three project.
- Despite previous reports of a decline, new research shows that land values in Beaver County are increasing. This follows Shell’s previous announcement last year to develop a multibillion-dollar ethane cracker plant in the area.
- The 146-acre Pittsburgh Mills mall is to be sold this month. Sale of the property will include the mall building as well as several plots of neighboring commercial property.