Jan 12, 2017, 10:20 AM
Before the Great Recession, companies would allocate about 300 square feet per person in the workplace. As more offices adopt more efficient layouts, that number has dropped to 200 square feet—and as low as 150 square feet in complete activity-based layouts. While this means more employees can fit in the building, the number of parking spaces remains the same.
Urban offices where employees rely on public transit and parking garages are fairly unscathed, but parking is a big factor for companies seeking space in the suburbs. In many cases, they can’t lease space at their first or even second choice location because the building doesn’t meet their parking needs.
So, what’s the solution? There are a few options for tenants desperate for more parking spots, but auto industry disruptors like ride sharing companies are already changing commute patterns. The suburb-bound businesses that adapt to these new solutions—and incentivize them—will relieve parking pains fastest.
Where to find parking relief now
- Nearby parking lots
Unused parking lots are hard to come by, but some companies are electing to rent parking spaces from buildings that aren’t yet fully leased.
In Orange County, for example, companies are spending an average of $35 to $50 per stall on monthly parking space rentals (though prices range as low as $25 up to $100).
Depending on distance, employers should also provide a shuttle service to drive employees between the two lots. Of course, this is a temporary solution. As soon as the building is fully leased, the landlord will take back spaces for their own tenants.
- Commuter benefits
Encourage employees to not drive to work with commuter benefit packages. Offer carpooling incentives and help employees find coworkers with similar commute routes and work schedules.
Make it easier to bike to work by providing showers, lockers and bike parking at the office. Bike incentives not only reduce parking usage and costs, but also offer tremendous health benefits for the employees and environment.
- Car sharing
Make it easier (and less costly) for employees to rent a car when they need it. Like ride sharing services, car sharing firms are growing fast and beginning to offer business accounts and partnerships that provide major discounts to employees.
Competition in this industry continues to increase as major carmakers enter the car share world. Following Zipcar’s lead—a subsidiary of Avis Budget Group, Inc.—Enterprise Rent-A-Car has entered the mix with its own Enterprise CarShare.
General Motors started its own car sharing firm Maven and BMW has launched ReachNow. Toyota and Lexus have agreed to team up with Getaround, of which the partnership is stated to include the option for car lessees of select vehicles to join Getaround and make vehicle payments directly from their car sharing income.
Rather than provide company cars (that sit in the lot), employers can run cost-benefit analyses to learn whether certain vehicles can be replaced with an on-demand service. Or instead of giving paid parking benefits, employers can alleviate parking demand by offering car sharing credits instead.
And in the future
- Autonomous vehicles
The auto industry disruptor with the greatest potential to impact office parking is the advent of autonomous vehicles. This has become an extremely competitive market with car manufacturers, technology firms and ride sharing companies all working towards developing these vehicles.
It’ll take several stages from development to consumer-use of autonomous vehicles—from limited self-driving automation to complete automation—before ever becoming mainstream. Implementation is still years away due to software developments, government regulation and of course consumer uptake, but when autonomous vehicles become ubiquitous, traditional office parking lots may greatly reduce in size.
As the IoT continues to evolve, it’s expected that autonomous vehicles will not only be able to drive people to work, but also be programmed to drive back home (or to any location) and then return to pick people up at the end of the work day.
What happens to all of those parking lots? Developers would have several revenue-generating options of how to use the space. Mixed-use and retail space would be the most strategic choice as suburban markets continue to push better live-work-play communities and employees expect more convenience and amenities to make coming into the office worthwhile.
Download the full paper for more on auto industry disruptors and their impact on real estate.
Research: Jared Dienstag | Editor: Lillian Veley