By Adam Broderick
Senior Vice President
Jones Lang LaSalle
In recent years, office space utilization has trended more and more toward team environments with highly efficient layouts. In simpler terms, more people in less space. This also means more cars in the same amount of parking spaces.
City planners have traditionally required 3-4 parking spaces per 1,000 rentable square feet (rsf) of office space for new suburban office development projects in and around Indianapolis. Four employees per 1,000 rsf has historically been the baseline metric for calculating space needs. As companies have moved from private office environments to more efficient collaborative work environments over the past five years the metric has changed to five parking spaces per 1,000rsf. For example, a 150,000rsf property that was designed anticipating 4/1,000 parking would now require an additional 150 parking stalls to accommodate a full building at the 5 /1,000 rsf ratio. That comes at a steep cost. Not including the price of land, surface parking generally cost $4,000 – $5,000 per space, and structured parking is approximately $15,000 per space.
This begs the question: Where are they all going to park?
Some landlords are beginning to see the trend and they are positioning their properties to accommodate these higher parking requirements. Purchasing excess land that was never developed, restriping lots to fit more cars, and creating parking cross easements have all been solutions in winning deals with higher parking requirements. As space utilization becomes more efficient, we anticipate an increase in the amount of parking structures in the suburban market. Unfortunately, land in the majority of Class A office parks in the suburban market is scarce, and available land is priced for vertical construction, not parking.
Another solution to the parking crunch is modern public transportation. In December 2011, local officials endorsed a plan called Indy Connect. This plan suggests the phased implementation of an interconnected system of bus, rapid transit, pedestrian and bicycle pathways, as well as improvements of roads and bridges. The goal is to connect people to jobs and spur economic development. This would reduce the strain on the already over-parked Class A suburban office market.
The bottom line is something will have to give. Office space is being used in different more efficient ways, a trend that is likely to continue. Either landlords are going to have to accommodate this larger parking requirement or the public infrastructure is going to have to improve to a point will people in Indianapolis choose to use mass transit over getting in their car.
Most likely, it’s a combination of the two.