Real Estate Articles
How Much Parking Does My Property Need?
Written by Brent Pace for Gaebler Ventures
Whether you are leasing or managing a property you own, parking is an important issue. So how much parking do you need for your property? It depends on a few things: clientele, proximity to transit, and -- as always -- location, location, location.
If you are going to lease a building, you want to be sure to secure the parking you need to keep your employees happy.
On the flip side, if you are an owner, you need to make sure your building offers enough parking to stay competitive. So what are the key things to think about when you are trying to figure out how much parking you need? In my mind there are three important considerations: clientele, proximity to transit, and location.
Parking as a Lessee
As a Lessee considering office space, there is one important point to make about parking. Once you decide how much parking you need, whether it is 3, 4, or 5 stalls per 1,000 square feet of space, make sure you memorialize it in your lease. In other words, you should be very careful not just to go lease space in a building that has tons of parking outside. You need to secure your rights to that parking by putting it in your lease.
A simple trick Landlords can play is to tell you that the building has over X stalls per 1,000 square feet. But then, if you haven't secured the rights to a certain amount of the parking the Landlord has no obligation to make sure you receive any of it. What is to stop your Landlord from tearing up that parking lot and building another office building? This could really impact your business, so make sure you get a clause in your lease that specifies the amount of parking you are entitled to.
To determine how much parking you need you have to think closely about what type of company you are. Call centers and other firms with high-density cubicle functions require a lot of parking. A simple test to see if your parking is adequate is to divide the amount of space you are leasing by the number of employees you plan to put in the space. For example, if you have 20,000 square feet of space and 100 employees, you have one employee for every 200 square feet. That equates to a need for at least 5 stalls per 1,000 square feet.
I say at least for two reasons. First, you may need extra parking rights for visitors (especially if there are no visitor-specific parking spaces). Second, you may expand your employee base in the space you are leasing and could benefit from the flexibility.
Proximity to Transit
If you can lease a space in close proximity to transit, you can generally accept less parking. This is especially true if you have employees that are amenable to using mass transit or other means (such as biking) to get to work.
In the event that you lease in a building that is transit oriented, you should consider offering transit passes to your employees as part of their compensation or benefits package. In some urban areas the cost of a monthly bus pass is actually less expensive than the cost of a parking stall.
Location, Location, Location
As always, location is the key in real estate. You should be aware that in general you get higher parking ratios the further you are from an urban core. Five stalls per 1,000 square feet is common in the suburbs with 3 stalls per 1,000 being considered adequate in most cases. In a downtown area, it will be difficult to get up to 3 stalls per 1,000. And, if you lease in New York City, Chicago, San Francisco, or a similar urban environment, you shouldn't expect much of anything in the way of parking. This is part of the price you pay for doing business with everyone else in these high-priced locations.
Brent Pace is currently an MBA candidate at University of California at Berkeley. Originally from Salt Lake City, Brent's experience is in commercial real estate development and management. Brent will have tips for small business owners as they negotiate their real estate needs.
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