Tech in CRE

Get ready to travel through an underground city

July 26, 2017

Warehouses and other industrial properties like Kansas City’s SubTropolis are already being developed underground. But transportation will be the next thing moved below the surface of the earth, as evidenced by major proposals like Elon Musk’s new traffic tunnels for cars, the hyperloopand other underground rail projects.

What will these advancements in underground transportation mean for life as we know it, and for your role as a CRE professional?

What new developments in underground transportation mean for the future

Most obviously, highly advanced underground transportation will mean shorter travel times for commuters and other travelers. As a result, it will become reasonable for people to live and work hundreds of miles apart and to travel long distances for restaurants, shopping and other activities. For real estate development and investment, location will be less of a concern than ever before.

Now, imagine a world where freight trains, semi trucks and waste management vehicles operate entirely out of sight. Moving these types of vehicles underground will not only make the world above more aesthetically pleasing, but will also open new opportunities for development.

Aboveground commercial buildings currently used for transportation purposes like train stations, parking garages and lots, gas stations and more will see new opportunities for redevelopment, and as a result, new markets will open up for brokers, buyers and investors.

How brokers can emphasize the benefits of underground transportation

Once more industrial real estate and the majority of transportation moves underground, there will be some new best practices for CRE professionals to follow.

Consider a city in the future that is connected to the suburbs or another city via a high-speed, underground railway. Investors, buyers and tenants who were previously concerned with finding a location in a city center to reduce commute times will now have new markets to explore on the outskirts of their current city or even in another city altogether. Once travel times are drastically reduced, location will become less important, and you’ll need to focus your efforts on promoting other property benefits like smart building technology or proximity to other walkable neighborhoods.

You’ll also need to learn how to talk about the benefits of underground properties, such as lower rents and energy costs for industrial buildings. And if you focus on retail, you should take advantage of opportunities to sell both aboveground storefronts and the underground warehouses that serve them to the same buyer, at the same time.

And even if you never sell an underground property yourself, you’ll be able to emphasize how much more aesthetically appealing above ground spaces are once industrial and mass transportation is out of sight.

To learn more about the potential of underground real estate, check out our blog on invisible warehouse sales.

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