Parking Management: Strategies, Evaluation and Planning
Victoria Transport Policy Institute
5
Increasing Office Building Profits and Benefits
An office building has 100 employees and 120 surface parking spaces, providing one space per
employee plus 20 visitor spaces. The building earns $1,000,000 annually in rent, of which
$900,000 is spent on debt servicing and operating expenses, leaving $100,000 annual net profit.
Parking management begins when a nearby restaurant arranges to use 20 spaces for staff
parking during evenings and weekends for $50 per month per space, providing $12,000 in
additional annual revenue. After subtracting $2,000 for walkway improvements between the
sites, and additional operating costs, this increases profits 10%. Later a nearby church arranges
to use 50 parking spaces Sunday mornings for $500 per month, providing $6,000 in annual
revenue. After subtracting $1,000 for additional operating costs, this increases profits by
another 5%. Next, a commercial parking operator arranges to rent the building’s unused parking
to general public during evenings and weekends. This provides $10,000 in net annual revenue,
an additional 10% profit.
Inspired, the building manager develops a comprehensive management plan to take full
advantage of the parking facility’s value. Rather than giving each employee a reserved space,
spaces are shared, so 80 spaces can easily serve the 100 employees. A commute trip reduction
program is implemented with a $40 per month cash-out option, which reduces parking
requirements by another 20 spaces. As a result, employees only need 60 parking spaces. The
extra 40 parking spaces are leased to nearby businesses for $80 per month, providing $32,000 in
annual revenue, $9,600 of which is used to fund cash-out payments and $2,400 to cover
additional costs, leaving $20,000 net profits.
Because business is growing, the tenant wants additional building space for 30 more employees.
Purchasing land for another building would cost approximately $1 million, and result in two
separate work locations, an undesirable arrangement. Instead, the building manager stops
leasing daytime parking and raises the cash-out rate to $50 per month, which causes an
additional 10 percentage point reduction in automobile commuting. With these management
strategies, 87 parking spaces are adequate to serve 130 employees plus visitors, leaving the land
currently used by 33 parking spaces available for a building site. To address concerns that this
parking supply may be insufficient sometime in the future, a contingency plan is developed
which identifies what will be done if more parking is needed, which might involve an overflow
parking plan, providing additional commuter incentives during peak periods, leasing nearly
parking, or building structured parking if necessary.
This parking management plan saves $1 million in land costs, a $50,000 annualized value.
Parking spaces can still be rented on weekends and evenings, bringing in an additional $25,000.
These parking management strategies increased total building profits about 75%, allow a
business to locate entirely at one location, and provide parking to additional users during off-
peak periods. Other benefits include increased income and travel options for employees,
reduced traffic congestion and air pollution, and reduced stormwater runoff.