Quote:
Originally Posted by drummer
I would be all for removing minimums. Developers want to make money. Parking garages are dang expensive due to all the concrete, so far as I understand. A building without a garage would be relatively cheaper so far as construction cost, right? That said, they do need to consider what tenants want, and it seems like the market would find a balance.
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Agreed, however, garage parking generates a non-insignificant amount of revenue for downtown buildings.
For those that don't know, downtown office building tenants do not get free garage parking the way suburban office building tenants do. In addition to their rent, companies are charged $125-plus (unreserved) to $250-$350 (reserved) to up to $500 (executive) per space per month for each parking space they are assigned in the building. Companies are allotted parking based on how much square feet they lease in the building, and for downtown that's between 1 space per 1,000 sf to 3 spaces per 1,000 sf. That is not enough to cover all of their employees so they lease parking at other properties or surface lots to make up the difference, or they give an allowance to their employees to find their own parking/transportation alternative.
In addition the daily in-out, charged-per-hour parking, which buildings refer to as transient parking, generates a nice chunk of change.
For example Third + Shoal, which is for sale thus why I know this, is estimating $11M in rent for 2020, supplemented by $2M in contract parking and $738K in transient parking. Parking makes up almost 20% of the building's annual income.
And finally, building tenants absolutely want parking. If your downtown building doesn't have parking, the rent you can charge is significantly lower because companies expect to be able to park at their office location and will pay more to do so.