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 sq. ft. of property, i.e. a 20,000 sq. ft. office building with 100 parking spaces would have a parking ratio of 5 (spaces per 1,000 sq. ft.). Cities may often have requirements for minimum parking ratios, which may be 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 CAM, or common area maintenance fees, 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 sq. ft.), 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. Handicapped parking requirements are somewhat, and include:
- 101-150 Spots: 5 handicapped spots
- 151-200 Spots: 6 handicapped spots
- 201-300 Spots: 7 handicapped spots
- 301-400 Spots: 8 handicapped spots
- 401-500 Spots: 9 handicapped spots