Parking Not Getting Any Cheaper, Colliers Reports

September, 2010

Colliers International, a leading global real estate services organization, reports that parking remains expensive in the central business districts (CBDs) of North America’s major cities.
Collier’s 10th annual North American Parking Rate Survey, tracking 44 CBDs across the U.S. and 12 in Canada, is published to provide corporate real estate executives with the relative cost of parking, both on a daily and monthly basis.
The survey includes only covered or underground parking garages in prime CBDs. Parking rate data were collected during June 2010 by contacting owners/operators, checking rates by walking the CBDs of major cities, and utilizing third-party data.
Survey says …
It’s no surprise that New York, the only North American city with two CBDs tracked by the Colliers survey, ranked as one and two for Midtown ($538) and Downtown ($529), on the monthly parking list. Both New York districts were more than $100 per month higher than the third-ranked city, Boston ($425).
San Francisco ($375), Chicago ($320), Philadelphia ($300), Seattle ($285), Washington, DC ($245), Honolulu ($222) and Los Angeles ($210) round out the top 10. The national average was $161.50.
The top 10 cities for daily parking rates follows a similar pattern, with New York’s Midtown in first place at $40 per day, followed by Honolulu ($32.75), Boston ($32), Chicago and New York Downtown ($31), Los Angeles ($30), Philadelphia and San Diego ($26), and San Francisco and Seattle ($25).
The North American survey also reports on Canadian parking rates. For monthly parking, the five most expensive cities in Canada are Calgary (CAD$453), Toronto (CAD$336), Montreal (CAD$280), Edmonton (CAD$275) and Vancouver (CAD$267).
Colliers also produced a global parking survey, with London’s two CBDs in the top two spots on the monthly parking list, and New York barely making it into the top 10, at numbers 9 and 10. Other top 10 cities included Hong Kong, Tokyo, Zurich, Sydney, Perth and Brussels. As far as U.S. cities go, only Boston and San Francisco cracked the global top 25.
Abu Dhabi topped the global survey’s daily parking list at $55 per day, followed by Oslo, Tokyo, London and Sydney. In terms of U.S. cities, New York’s Midtown was the highest-ranked at number 12; however, Honolulu, Boston, Chicago and Los Angeles all made the top 25.
Holding steady
Ross J. Moore, the firm’s chief U.S. economist, points out that the survey shows how strong U.S. parking rates have remained in spite of the problems that have plagued the U.S. economy during the past couple years.
The Colliers survey states that the data indicate “that even in the face of economic hardship, parking garage owners and operators have managed to hold rates steady … Over the past year, Canadian and U.S. parking rates both registered little change, highlighting the high degree of stability in this often overlooked real estate sector.”
“Despite a loss of eight million jobs and a significantly more challenging business environment, few U.S. cities saw a significant reduction in parking rates” during the last 12 months, Moore says. Daily and monthly parking rates held relatively steady, with daily charges down 1.4% and monthly charges up 1.1%.
Moore sees the high demand vs. tight supply as a reason rates have not dropped significantly in the face of economic hardships. His report indicates that 70% of the cities surveyed showed that parking garages are 60% to 80% full Monday-Friday and on weekends during special events, and 20% showed they were usually full during those times.
“In North America, demand for parking is higher than supply,” Moore says. “The problem with parking is that it is difficult to make the numbers work. Building a parking structure is extremely expensive, and to get an economic return is difficult.
“Many people look at the price of parking and say: ‘How can they charge so much just for me to park my car?’ But it is a structure that obviously sits there 24 hours a day,” he continues. “If most people park their cars for eight hours a day at the most, you have an asset that is sitting there largely empty for 16 hours. But it still has to be paid for, in terms of property tax, maintenance and insurance. So, as a general rule, we don’t get a lot of overbuilding for parking, not just here in the U.S. but outside North America.”
Supporting Moore’s claim, the survey states that “just 15% of cities surveyed indicated new garages will be constructed in the next 24 months.”
“With the economy anticipated to recover only slowly, coupled with a still weak labor market, parking rates are expected to show little change in the coming year, but beyond the next 12 months, parking rates are expected to resume their upward trajectory,” the survey adds.
“I think the survey shows that parking is a great business, if you can get in at a reasonable price,” Moore concludes. “For all the talk of people abandoning their cars and taking up public transport, I think we have a ways to go before we get to that point.
“The parking industry seems stronger than ever. If you look at how our societies are laid out, we are heavily dependent on the car and will remain so for some time.”
(The North American and Global Parking Rate Surveys can be found on the Colliers International website at www.colliers.com.)
Pete Goldin, Technology Editor for Parking Today, can be reached at pete@parkingtoday.com.