Parking Ratio in Commercial Real Estate
2018-06-28
A parking ratio is a statistic that takes the number of available parking spaces in commercial property and divides it by the property's entire gross leasable area (GLA).
Key takeaways
- A parking ratio is a statistic that takes the number of available parking spaces, typically for an office property, and divides it by the property's entire gross leasable area (GLA).
- This ratio is most commonly expressed per every 1,000 square feet of property, i.e., a 20,000-square-foot office building with 100 parking spaces would have a parking ratio of five spaces per 1,000 square feet.
- In most cases, the higher a building's parking ratio, the more desirable it will be for potential tenants.
- Despite their benefits to tenants, higher parking ratios also typically lead to higher common area maintenance fees (CAM), since office building tenants usually pay rent on their portion of a building's common areas, which often include parking spaces.
What is a Parking Ratio in Commercial Real Estate?
A parking ratio is a statistic that takes the number of available parking spaces, typically for an office property, and divides it by the property's entire gross leasable area (GLA). This ratio is most commonly expressed per every 1,000 square feet of property, i.e., a 20,000-square-foot office building with 100 parking spaces would have a parking ratio of five spaces per 1,000 square feet. Cities often have commercial zoning ordinances that set minimum parking ratios, which may vary based on property type; for example, retail projects may require a higher parking ratio than industrial developments.
Higher Parking Ratios Can Be More Desirable, But Also More Expensive
In most cases, the higher a building's parking ratio, the more desirable it will be for potential tenants. For example, class A office buildings may often have a higher parking ratio than class B buildings, though this can vary greatly between individual projects. Despite their benefits to tenants, higher parking ratios also typically lead to higher common area maintenance fees (CAM), since office building tenants usually pay rent on their portion of a building's common areas, which often include parking spaces.
Office Parking Ratios May Be Increasing
Research suggests that office building tenants are asking for more parking - and many developers are responding by adding more parking spaces to their current developments, increasing their parking ratios. While the most common office building parking ratio is currently around 4 spots per 1,000 square feet, many tenants have been asking for ratios of 5 or 6. Though adding parking spots can be expensive - $2,000 to $6,000 per space for surface lots, $12,000 to $25,000 for garages - developers are often seeing this as an investment that may be able to improve the long-term occupancy of their projects.
Parking Must Be In Compliance With The Americans With Disabilities Act
In addition to making sure that their parking ratio is sufficient for local regulations (and is enough to keep tenants happy) developers interested in building new properties must take into account the Americans with Disabilities Act (ADA) when designing or planning a parking lot. For the first 100 parking spots, there must be 1 handicapped spot per 25 spots. Beyond that, handicapped parking requirements include:
Total Number of Parking Spots | Required Number of Spots for People With Disabilities |
|---|---|
101-150 | 5 |
151-200 | 6 |
201-300 | 7 |
301-400 | 8 |
401-500 | 9 |
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Frequently asked questions
What is a parking ratio in commercial real estate?
A parking ratio is a statistic that takes the number of available parking spaces, typically for an office property, and divides it by the property's entire gross leasable area (GLA). This ratio is most commonly expressed per every 1,000 square feet of property, i.e., a 20,000-square-foot office building with 100 parking spaces would have a parking ratio of five spaces per 1,000 square feet. Cities often have commercial zoning ordinances that set minimum parking ratios, which may vary based on property type; for example, retail projects may require a higher parking ratio than industrial developments.
Research suggests that office building tenants are asking for more parking - and many developers are responding by adding more parking spaces to their current developments, increasing their parking ratios. While the most common office building parking ratio is currently around 4 spots per 1,000 square feet, many tenants have been asking for ratios of 5 or 6. Though adding parking spots can be expensive - $2,000 to $6,000 per space for surface lots, $12,000 to $25,000 for garages - developers are often seeing this as an investment that may be able to improve the long-term occupancy of their projects.
How is parking ratio calculated in commercial real estate?
A parking ratio is a statistic that takes the number of available parking spaces, typically for an office property, and divides it by the property's entire gross leasable area (GLA). This ratio is most commonly expressed per every 1,000 square feet of property, i.e., a 20,000-square-foot office building with 100 parking spaces would have a parking ratio of five spaces per 1,000 square feet.
Research suggests that office building tenants are asking for more parking - and many developers are responding by adding more parking spaces to their current developments, increasing their parking ratios. While the most common office building parking ratio is currently around 4 spots per 1,000 square feet, many tenants have been asking for ratios of 5 or 6.
What is the average parking ratio for commercial real estate?
The most common office building parking ratio is currently around 4 spots per 1,000 square feet, though many tenants have been asking for ratios of 5 or 6. Cities often have commercial zoning ordinances that set minimum parking ratios, which may vary based on property type; for example, retail projects may require a higher parking ratio than industrial developments.
What are the benefits of a high parking ratio in commercial real estate?
In most cases, the higher a building's parking ratio, the more desirable it will be for potential tenants. Higher parking ratios can lead to higher occupancy rates, as tenants are more likely to choose a building with more parking spots. Additionally, higher parking ratios can lead to higher common area maintenance fees (CAM), since office building tenants usually pay rent on their portion of a building's common areas, which often include parking spaces. Research suggests that office building tenants are asking for more parking - and many developers are responding by adding more parking spaces to their current developments, increasing their parking ratios.
What are the drawbacks of a low parking ratio in commercial real estate?
The drawbacks of a low parking ratio in commercial real estate are that it can make a building less desirable to potential tenants. For example, class A office buildings may often have a higher parking ratio than class B buildings, which can make them more attractive to tenants. Additionally, lower parking ratios can lead to lower common area maintenance fees (CAM), since office building tenants usually pay rent on their portion of a building's common areas, which often include parking spaces.
How can I increase the parking ratio of my commercial real estate property?
You can increase the parking ratio of your commercial real estate property by adding more parking spaces. This can be expensive, with surface lots costing $2,000 to $6,000 per space and garages costing $12,000 to $25,000 per space. However, it can be seen as an investment that may improve the long-term occupancy of the project.
Higher parking ratios can be more desirable for potential tenants, but they also typically lead to higher common area maintenance fees (CAM).
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