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Increased Parking Utilization and Revenue for Existing Spaces

Executive Summary

In December of 2001, Crown Realty Partners was in the due diligence phase of buying a 240,000 square foot two-building office and underground garage complex that included a problematic, busy surface parking lot.

Prior to Crown's purchase of the complex, Parkway Corporation was asked to submit a proposal detailing how we could provide parking management superior to that provided by the then current ownership. Parkway proposed a new parking strategy that used the existing spaces differently and increased the transient capacity by over 50%. The added capacity resolved the previous backups at the parking entrance. At the same time, we were able to eliminate a tenant waiting list for monthly parking.

The solution involved utilizing all the spaces, including those at grade and in the garage below grade, as a single, synchronized system. The parking shortage at the site was only a perception, not a reality. Parkway was able to harness the complex's full parking capacity while driving up revenue.

Business Challenge

The complex includes a 125 car surface lot and a 295 car underground garage. Cars were constantly blocking the parking entrance while they waited to get parking spaces, reinforcing the office tenants' perception of an extreme parking shortage.

The problem was hurting lease renewal negotiations and the ability to attract new tenants. Additionally, there was a poor level of service that was not compatible with Crown's goals to reposition the complex and earn a high level of investment return.

Parkway not only offered parking solutions to these problems, but also did it in a way that added value to both the building purchaser and to Parkway.

The Solution

Parkway became both an investor in the building and the parking operator.

The lower level garage had been used exclusively for monthly parkers and was a little below full capacity. The surface lot in contrast was parked to capacity from opening to close, with short term half-hour to hour-and-a-half customers. A long line of parkers would wind out into the curb lane of the street waiting for each car to exit so one could enter.

• We analyzed the existing parking volumes and mix and concluded that we could increase the transient parking capacity by over 50% through combining the two levels.
• We initially eliminated about 20 monthly parkers who were not occupants of the two office buildings.
• We added transient revenue control equipment points and a cashier's booth in the lower level.
• We reorganized the traffic flow within the garage to allow us to “stack” cars by taking keys, “key cars,” at peak times and to funnel all cars to exit through the new control points. A single staff person was added in the lower level with two functions: to cashier the transient cars and move the “key cars”.
• An added staff person at the street level garage entrance manages the flow of transient cars so that we can utilize the new lower level capacity in tandem with the surface lot capacity, thereby ensuring that there are spaces available in both areas at all times.

Value and Benefits Delivered

Parkway added value.

• The transient capacity went from 120 spaces to over 180 spaces. The backups onto the street at the parking entry were eliminated. A waiting list of over 25 names for monthly parking passes for occupants of the offices was eliminated.
• With the parking problem eliminated, office leasing renewals picked up pace.
• The first and last impressions of the building are experienced for many people while entering or exiting the parking facility and Parkway improved those experiences. Parkway provided a higher level of service resulting in a more convenient parking experience and impression of the building.
• Parking revenues rose over 14% year on year, exclusive of rate increases that were put into effect. The increased revenues created added value for the building.

We believe so strongly in our ability to provide added value to existing parking assets and also to the properties the parking serves that we actively seek out opportunities to co-invest alongside owners of the properties for which we manage the parking.