Parking lots have served many uses during the era of COVID-19. They’ve become homes to open-air food and farmer’s markets, pick-up locations for to-go meals from restaurants, voter registration sites, drive-in movie theaters, outdoor haunted houses and importantly, COVID-19 testing locations, among other things.
With fewer people driving into the office or spending a significant amount of time shopping in malls or department stores, there’s much more unused space in parking lots these days. Rather than let that space go to waste, property owners and investors can tap into new uses for parking lots, in addition to the ones above, to still generate a bit of income on the property.
Commercial real estate intelligence company Propmodo suggests renting out shared parking spaces at a reduced rate so that property owners can still generate some revenue, and employees renting out the space don’t feel like it’s a waste to do so if they’re only coming into the office once or twice per week. That way, employees can pay a reduced rate to share a space with other workers who come in different days of the week, and property owners can free up spaces to rent out to other entities.
Another option is to advertise parking lot space through an online platform like the one Denver-based company Reactiv has created. The company’s online marketplace connects vacant commercial space with everyday consumers looking for a larger area in which to do some socially distant activities, “creating immediate revenue for owners and flexibility for renters.”
Another way to continue earning dollars on parking spaces is by renting them out to fleets or rental car companies that may not have enough space to house unused vehicles right now, Paul Moore, managing partner at Wellings Capital, told Inman. Because many people have avoided travel during COVID, a lot of rental cars are not being used, and need parking spaces, since rental car companies typically expect 40 to 60 percent of their cars to be rented out at all times. The same may hold true for other kinds of vehicle providers as well, and is worth looking into on a local level.
“Even if they got $50 a month per space, well if that was 100 spaces, that would still be $5,000 a month they didn’t have,” Moore said.
Similarly, Moore noted that there’s ample demand for RV and boat parking, particularly in homeowners association communities (HOA) where there may be restrictions against parking in a visible location in the community. Owners of parking lots or parking garages could relatively easily market to these types of communities, which may have more individuals looking for parking now moving into winter months.
“People pay up to $200 a month for just parking their RV or boat,” Moore said. “And if there’s electricity and it’s covered, then it could be more.”
For those looking for additional incentives to repurpose their commercial parking lot, Moore said that portable storage with the use of shipping containers is a good option because of the tax benefits.
“You can depreciate them very quickly,” Moore said of shipping containers. “Under the current tax law, I think you can actually depreciate the cost of the entire shipping container in year one against income, and then carry that loss forward to future years.”
Investors looking to do that may want to check demands for storage in the area by visiting a website like Radius Plus, which completes an analysis of self-storage capacity and demand within a certain radius of a designated location for varying fees, depending on how much information you want and how long you spend on their website. Or, you can check demand by calling around to storage facilities in the area to see how full they are can also provide an estimate of local demand.
Of course, whether or not a property manager needs to rent out parking lot space right now will likely depend upon the COVID-19, and greater economic, situation in their geographical region.
For instance, Dexter C. Rumsey, IV, partner at NAI Charleston, told Inman that although many tech-occupied office buildings in his markets in South Carolina and Texas have largely been left vacant with most workers opting to work from home, businesses are continuing to pay for use of those parking spaces. Therefore, property owners aren’t feeling quite as much financial stress as perhaps other areas economically harder hit by the pandemic, where more businesses may be going under or are struggling to finance the many bills associated with renting office space.