Your office can only hold as many people as can get there. Given that, according to the 2017 American Community Survey, 76.4 percent of them drive themselves there, it’s more accurate to say that your office can only hold as many people as can drive — and park — there. With this in mind, your building’s parking ratio has a huge impact on how well you can accommodate your workforce.
What’s a Parking Ratio?
A parking ratio is a commercial real estate metric that looks at the relationship between a building’s size and the number of parking spaces in its lot, ramp or garage. You calculate it by dividing the building’s number of spaces by its total square footage in thousands of feet. For instance, take a 40,000 square foot building with a 200 space parking lot. Divide 200 (spaces) by 40 (thousand square feet) to find a parking ratio of 5 spaces per 1,000 square feet of space.
When you have a parking ratio, you can easily compare lot sizes between differently sized buildings. A 50,000 square foot building with 210 spaces effectively has a smaller lot than the building in the example above, since the 4.2/1000 ratio means less space than the 5/1000 ratio in the first building.
Who Defines Parking Ratios?
While calculating the parking ratio is simple fourth-grade math, three different factors go into determining what a building’s ratio should be.
Use. Different types of buildings require different parking levels. A restaurant with tightly packed tables needs more parking than a warehouse that is filled with lots of boxes and very few people. Offices tend to fall in the middle of industrial and dense retail uses.
Local regulations. Most building and zoning codes specify parking ratios. Before a developer can build a building, they have to submit plans that describe the size of the building and of its parking lot. If the two do not align with local regulations, the property can’t be built.
Market reality. Finally, the needs of the market also determine how much parking a building will have. If you are in a driver heavy city — like many suburbs — tenants will demand ample parking, even if it’s in excess of what the local code requires.
What’s the Right Parking Ratio?
For office space, you’ll hear a rule of thumb that a ration of five spaces per 1,000 square feet is about right, with applications like medical office and call centers requiring more parking. However, the actual “right” number varies greatly depending on two factors.
First, figure out how many people you will squeeze into your space. If you are building a dense office with fewer square feet per employee, you will need more parking, regardless of the property’s parking ratio. Reserved spaces, arrangements with outside parking facilities and the like can help make a more tightly parked building work for you.
Second, figure out how your employees get to work. In Manhattan, it’s likely that many of your workers will take public transit to work and you won’t need that much parking. In suburban Atlanta, though, it’s conceivable that almost everyone will drive. If your workforce skews towards Millennial and Generation Z workers, you might see more people walking, biking, or ride sharing to work. Understanding your workforce’s commute patterns — and projecting what they will be in the future — can help you choose the right building.
Ultimately, while the parking ratio lets you compare buildings in theory, what really matters is whether or not a building has enough spaces for your workers. Determining your needs, and then negotiating for adequate parking for cars as well as focusing on your square footage will help you find an optimal space.
Originally published on March 6, 2020 by our good friends and colleagues at iOptimizeRealty. The original post can be found HERE.