Sell for More Trivia is a weekly blog series that playfully presents a trivia question about commercial real estate.
Historically, most municipalities have enforced minimum parking requirements for all new developments…typically amounting to about five parking spaces per 1,000 square feet.
These minimum parking requirements are now coming under increased scrutiny in this age of abundant transportation alternatives and the rise of pedestrian-oriented retail and mixed-use projects.
Rather than insisting on these requirements, many municipalities have already reduced or eliminated them altogether.
For shopping center owners, these changes mean greater operational flexibility and a potentially healthier bottom line, particularly at shopping centers undergoing redevelopment or adding on nonretail tenants. Reduced parking requirements may allow these landlords to carve out pad sites in underused parking-lot sections…thus helping to boost traffic and income.
And reduced parking could save developers an estimated $20,000 per space in construction costs.
The traditional parking ratios are antiquated. Parking is no longer one size fits all. It’s driven by the specific needs and peak demand times of each of the users.
For example, San Francisco’s Board of Supervisors is reportedly on track to do away with minimum parking requirements. Knoxville, Tenn. recently reduced minimum parking requirements for commercial uses by an estimated 20%-40%. Knoxville says “We’re trying to provide developers flexibility by allowing them to respond to market demand instead of imposing an arbitrary parking number.”
Cities should understand that developers aren’t going to under-park their site and hurt their bottom line.
The key to generating more efficiency is to gauge parking ratios along with the peak and nonpeak times of each tenant.
Also look for landlords to designate load and unload areas for car-hailing and car-sharing services.
Finally, we must anticipate that autonomous vehicles will bring significant change to parking layouts which will likely require designation of exclusive parking and charging areas for those vehicles. As shopping centers sign 10- or 15-year leases, they will need to include provisions for autonomous vehicles that allow the retailer and landlord to make parking adjustments.
We simply need common-sense flexibility which is not a trait that government agencies are known for…but this recent progress is encouraging.
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About Beau Beach, CCIM
Beau is a tenacious Commercial Real Estate Broker, author and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.
Beau leads Prowess IRES which is a commercial real estate broker for sellers in the Nashville, Milwaukee, South Florida and Chicago markets.
He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.
Beau can be reached at 414.324.4938, 615.603.9770, click to schedule a call or Beau@ProwessIRES.com