Ride-sharing services. Telecommuting. Densification of workspaces. A future with driverless cars. All these factors curtail demand for onsite parking at office properties.
Well, maybe someday they will.
Through 2023, though, tenant demand for office parking is expected to either stay the same or even increase. That’s the consensus among 75% of office leasing professionals and investors surveyed by CBRE.
Evidently the impact of transit-oriented developments or live/work/pay environments with high walkability factors isn’t as dramatic as it may seem. Eighty-six percent of U.S. workers still commute by car.
Conversely, parking ratios for new buildings have decreased since 2000 in 14 of the 15 largest U.S. and Canadian office markets. The exception is California’s Orange County, which has minimal public transit usage compared to the other markets CBRE studied.
That being the case, there’s still plenty of pre-2000 office stock in both CBD and suburban markets. “Tenant demand for office parking is going to continue to stay strong for the next five years, despite all the talk of worker mobility from ride sharing, autonomous vehicles and other on-demand transit options,” said Andrea Cross, Americas head of office research for CBRE.
Since parking requires long-term planning, Cross continued, “the challenge for office owners, developers and city planners is balancing current demand with future uncertainty—both in mobility trends and office densities/flexible space—while at the same time, understanding shifts in the value parking adds to an asset.”
A new CBRE report identifies some parking trends to watch:
– Valet-style drop-off/pick-up zones: Many owners and developers are creating pick-up and drop-off areas in parking structures or adjacent locations to accommodate employees and visitors arriving via shared-ride services such as Uber and Lyft. Examples include Trammell Crow Company’s recently-completed Park District in downtown Dallas and The Boardwalk in Irvine, CA, both with central plazas for ride-share drop-offs and pick-ups.
– Ride-sharing credits: In some buildings, landlords and employers are replacing traditional employee parking allotments with ride-sharing credits or services. These can serve as the sole mode of transportation for an employee or the “last mile” between a public transit station and an office.
– Convertible parking structures: Some owner/developers with longer-term hold strategies are building parking structures that are easily convertible to other uses. However, these require higher floor-to-floor heights—12’ to 14’ for office space conversion—and other specific design elements that typically make them more expensive to build than traditional parking structures.
– Adaptive reuse: One potential solution for meeting current tenant demand for parking, but providing future options, is to build the parking structure half above grade and half below. This enables the owner to demolish the upper portion and build an alternate use over the subterranean parking.
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces.
Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications.
Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).
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