Real estate professional Brian Sidman has worked with large scale real estate advisory companies over his career. Brian Sidman founded and leads as the managing principal of BAS Holdings Investments, LLC, a company that acquires and manages commercial real estate parking assets.
Commercial parking properties generate substantial revenue in the United States. The International Parking Institute estimates that there are more than 105 million parking spaces in the country generating about $20 billion annually. With such attractive numbers, many investors are drawn to the market. Here are three factors to consider before acquiring a commercial real estate parking asset:
- Location. As with all real estate investments, location holds the most weight when determining an investment. Specifically, urban areas with strong economic activity and new construction of offices, hotels, retail centers, and other commercial developments make for attractive locations.
- Zoning Laws. In addition to a location’s economic activity, consider zoning laws and other guidelines. Some municipalities restrict the construction of parking facilities or make the process very expensive, which may make new construction difficult but puts a premium on already existing facilities.
- Parking Ratio. Defined as the ratio of a property’s available parking spaces to gross leasable area, the parking ratio is expressed per 1,000 square feet of property. Some cities have minimum parking-ratio requirements, while others may require higher parking ratios for specific types of properties. Factoring in the parking ratio is a good way to estimate the investment potential of local properties. For example, if a local center has buildings with parking ratios of four spaces per 1,000 square feet, but tenants desire a ratio of six per 1,000 square feet, the area may provide an opportunity for investment.
- Redevelopment or repurpose opportunity. In an ever changing environment relating to technology and the future of cars, it is always important to determine if a parking asset may be repurposed should there be less cars on the road. When we make a decision on a parking investment, one box we check is if the asset is located in an area with a high velocity of population growth that may be positioned for a self-storage or data center conversion in the future.
