83 Space Surface Parking Lot Purchase

[April Crossley]

I was recently presented with the opportunity to buy a surface parking lot. 83 spaces. In an area I am very familiar with. Spaces are rented to local businesses - for example, one business will pay for 10 spaces for their employees, etc.  Lot spaces are not rented to individuals.   I am wondering if anyone is familiar with purchasing surface parking and if so... #1. What do you use as a "vacancy" rate? The lot has been fully rented for years as it is in the middle of a city.   #2. Would it scare you to buy a parking lot if your intention is long term hold (with as popular as Uber has become, self driving cars, etc).  

Appreciate any insight. Parking Lots are out of my realm of  my usual purchases (single family and small multifamily). thanks! 

[Andrew Johnson]

April Crossley I worked for a parking company for a few years so my opinion is based on that perspective...

1.) Don't manage it yourself. Get a parking management company to lease it from you. They will usually structure a lease from 2-5 years. You don't want to do parking enforcement...you really don't. Good parking companies are also good at dynamic pricing and...well...you're not :)

2.) In a metro area, surface lots *sometimes* have more value to a parking management company than to you. Why? They can use it for valet overflow if they are working with hotels or restaurants nearby.

3.) Ideally, you don't want to rent spots to a local business. You make money by turning over the spots many times a day. Local businesses, condo complexes (never enough parking there), are great but won't maximize value.

4.) Uber/Lyft has destroyed "event" parking. And it's done so quickly. So those super premium nights (Rhianna concert in a metro area) where you charge $25/night are just gone. People Uber to-and-from. Some of this does depend on the age bracket of the audience but (in general) it's hurting peak pricing and occupancy.

Anyway, rambling now...

Hope this helps 🤷🏻‍♂️