During the ULI Fall Meeting in Boston, a panel of developers and investors concluded that innovations in private transit like ride-sharing and self-driving vehicles are already altering city's economic formulas for public transit development.
In most major cities, public transportation ridership is dwindling, negatively impacting transit development plans, says David Bragg, managing director of Green Street Advisors. Beyond that, high transit scores are less important now than they were 10 years ago, says Doug Linde, president of real estate investment firm Boston Properties, due in large part to changing workforce demographics, adding, “Creating a place, not just a development next to transit, is growing more critical," UrbanLand reports.
The emphasis these days is more on walkability than a direct rail or metro connection, said Matt Birenbaum, chief investment officer at AvalonBay Communities, an equity real estate investment trust (REIT). The ability to walk to shops and restaurants can add more value than proximity to a rail link, he said. The “transit premium” for valuation is decreasing, in part due to the recent surge in TOD construction, Birenbaum said. “There may be more demand, but there is also more supply,” he noted. In emerging markets like Denver, “we’re seeing more value off the transit line,” he said.
