Re-Purpose and Develop City Garages if Fewer People Drive?
Garages eat up valuable urban space, and pandemic-led work changes and a greater use of car driving services like Uber and Lyft could permanently ease demand.
NEW YORK – Investors and developers are rethinking conventional parking garages in city centers, and are a bit excited about developing these large swaths of space. The pandemic has left many of parking garages mostly empty for now as more people work remotely – but ride-hailing services like Uber and Lyft and the rise of urban bicycling infrastructure had already started to lower demand for car ownership within cities.
Now, developers are targeting urban parking garages as prime sites for redevelopment.
“By 2018, 2019, 2020, I would say every time I would take a garage to market, 50 percent of the queries start with, ‘Hey do you have the zoning analysis, what else can I do here?” David Schechtman, a senior managing director at Meridian Capital Group, told Commercial Observer. “Any time a garage comes to market there’s tremendous interest in it.”
And those interested parties aren’t thinking about parking.
The developer of one of the tallest buildings in the U.S. is overhauling what was once the largest municipally owned parking garage in Boston. The developer, Millennial Partners, is building a 691-foot, 1.6 million-square-foot condo and hotel tower in its place.
The number of parking garages and lots in the U.S. has increased over the years – from 14,200 in 2000 to more than 19,000 by 2020, according to IBISWorld research. Annual revenue has increased too.
But since the COVID-19 outbreak, time spent commuting has plunged and fewer people need a place to park. Owning or investing in parking garages hasn’t proven very lucrative, a trend that could continue if the current work-from-home trend still has an impact after the pandemic subsides.
“People started saying, ‘Maybe it should be storage, or an education facility, or rehab or medical,” Schechtman said. “People started looking at landlocked garages and saying ‘OK, I can’t build a condominium here, there may even be a condominium upstairs, but what else can I do?”
Some garage owners have already converted unused spots during the pandemic into storage units or even last-mile delivery spaces for e-commerce providers such as Amazon.
Source: “Space Race: Investors and Developers Rethink Parking Garages Amid COVID,” Commercial Observer (Sept. 15, 2020)
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