As folks shift away from traditional dealerships in favor of direct sales like Tesla, or car delivery services like Carvana, dealerships need new ways to bring people in the doors. If not that, then at least figure out new ways to make money. Toyota of Walnut Creek in California is trying something new, partially because real estate prices are through the roof, and it probably needs space for all of those new Lexus IS 500s for sale.

The plan is for the dealer to become a 165,000-square-foot dealership and service center by 2026. That will include 54 bays, eight for quick service, 800 spaces for cars all placed on 7.5 acres of land. That's just the dealership upgrade, but Toyota of Walnut Creek is going bigger.

Above the dealership will be 400-plus-units of rental housing, recreational space, swimming pools and more. At a cost of $279 million it will be one of the most expensive auto dealership developments in the country. Adam Simms, co-owner of Price Simms Auto Group, is leading the charge.

"We're going to continue to get more and more challenged at maintaining presence with these brands as real estate prices escalate," Simms told Automotive News. "So instead of just thinking horizontal, we've got to start thinking about multidimensional, and that's what this project really represents."

The dealership is high volume, one of the highest in the US, but it's one of the few stores that is out of compliance with the brand's current image. If the dealership was just revamped in its current location, it would lose 10-15 percent of its gross profits. But if it adds residential space, the two would subsidize each other.

The deal has been presented to local officials, but it is still waiting for approval on zoning, which was recently changed in Walnut Creek.

"If you were to list all the wishes that the city had when they created the rezoning and put the vision behind the plan, we check all the boxes," said Stephen Scanlon, a partner with one of the project's developers. "That was the thing that the city was always looking for, a vector to catalyze [that area] and make it go. And Toyota of Walnut Creek will be that thing."

If you're wondering about noise, the project leaders note that bedrooms will be at least three floors from the service area.

The question remains, will this be the rule for future dealerships or the exception? We know that buyers visit less dealers than they used to, which means that extracting every cent of profit is a must. If dealers in expensive areas like this (or New York, Austin, etc.), can keep afloat by going vertical, and helping out the city with new residences, more power to them.