How Parking Garage Conversions Can Help Address Overbuilding

Oversupply of parking for office buildings continues to be ineffective in terms of capital expenditure and material waste. I first wrote about the unrealistic parking ratios expected by the real estate brokerage community in 2018. Brokers continue to operate under the principle of protecting the tenants they represent, and CMBS lenders continue to routinely dictate parking requirements that far exceed the current or future needs of corporate office facilities. Four parking spaces per 1,000 rentable square feet of office space is an outdated standard that has resulted in hundreds of thousands of seldom or never used parking spaces. DonPowellOne of the region’s most successful developers, Granite Properties, did a formal study at its Granite Park that continues to serve as a relevant metric and clearly identifies the over-parking problem in suburban office buildings. Its study found that 2,600 parking spaces within its mixed-use complex have never been utilized. BOKA Powell estimates the order of magnitude of investment in those unused spaces equates to just under $40 million—28,000 cubic yards of concrete placed, 144,000 construction person-hours expended, and 819,000 square feet of inflexible, single-purpose concrete structure. Contrarians say that as buildings age, the class of tenants drops a notch or two, resulting in more back of house office uses (i.e., higher-density workspaces), and that is when the higher parking ratio will pay off. Click to read more at www.dmagazine.com.