Why "managed" parking costs more than you think.

There’s likely a gap between what your parking asset earns today and what it should earn. Worse yet, you’re likely leaving more than revenue on the table. Significant asset value is probably going unmeasured and unrealized.

This is what we call the parking value gap. It’s the difference between your current performance, your potential performance, and the total value that parking asset optimization can create.

The value gap doesn’t exist because of hidden operational costs or fees, although those are a problem, too. A misguided management approach is what creates the gap. Ultimately, this approach doesn’t create value, it simply extracts it by maintaining the status quo.

And the problem is larger than simple pricing changes or marketing efforts. Improving revenue is just the start of understanding and capturing total unrealized value.

Here's a simple visualization of this concept:

Total asset value, as shown here, represents what your property is worth (i.e., capitalized value).  

On the left-hand side, you have an operational mindset, focused on “property management.” It’s maintaining performance, but that’s all.

On the right-hand side, you have asset optimization, which blends dynamic pricing, unified technology, license plate recognition, and revenue insights with an incentivized management approach to improve performance.

Asset management takes into account your total asset value beyond incremental adjustments, treating parking as a revenue driver and closing the gap that most properties experience.

This approach generates meaningful NOI improvements which, sustained over time, translate to significantly higher asset value. 

The graphic illustrates a fundamental shift in perspective on how to manage your parking, which we cover in our Manifesto. In this piece, we’ll look at why this gap happens and what you can do to close it. 

Most parking management is deficient by design.

Despite how the intro sounds, we’re not actually tearing down the operational mindset. We’re pointing out its insufficiency at creating the conditions for real value growth. Instead of creating those conditions, it maintains a baseline that’s usually underperforming by 20-30%+. 

Preserving a baseline is the only management option available when you’re facing challenges like these:

• You can’t measure what’s happening in real time
• You’re reacting to lagging data
• Your systems are fragmented and siloed
• Your operator isn’t actually incentivized to grow NOI

These kinds of inefficiencies are structural. It's hard to overcome their limitations because the industry is fundamentally organized this way. 

It’s just easier for technology providers and management companies to just continue extracting value.

That’s how I put in a recent post: most operators choose the path of least resistance, languishing in underperformance because changing the approach requires an entirely different way of thinking.

The value gap is costing you more than monthly underperformance.

The parking value gap doesn’t show up as a fee you pay. It starts as NOI stagnation or decline due to underperformance, and no insight into why. That stagnation and underperformance then has a multiplier effect across your entire asset when viewed through the lens of commercial property valuation. In reality, the difference between the two approaches outlined above can represent millions of dollars in untapped property value.

Here’s what it looks like in practice:

• A 400-space facility generates $240,000 annually. With the right management approach, that same facility could produce $360,000 per year. At a 7% cap rate, that $120,000 gap is $1.7 million in unrealized property value.
• Poor experiences drive turnover, which costs 4-6 months of base rent per vacancy. A property moving from 85% to 90% occupancy while increasing parking NOI from $240,000 to $360,000 can see its value rise from $42 million to $47.5 million. The value gap: $5.5 million, or 13% of the property's worth.

How to start closing the parking value gap.

You need to think beyond the operational approach ("keeping the lights on"). It requires structural changes, and the specifics only work when the underlying approach shifts from management to asset optimization:

• Make pricing demand-responsive to capture value during peak demand while remaining competitive during slower periods. Read our parking pricing strategy guide.
• Integrate your technology for real-time visibility and data-driven decisions instead of fragmented vendor solutions.
• Align incentives so your operator benefits when your parking performs, not through fixed fees that cap your upside. Learn about parking management agreements.

We cover many of the tactical details in our parking management handbook.

Do you know your value gap?

For most property owners, this value gap is invisible. But the gap exists whether you acknowledge it or not.

Right now, your asset might be operating well enough to avoid complaints but underperforming enough to suppress your property's value by millions. That gap compounds every year you leave it unaddressed.

Want to know your property's potential?

At AirGarage, we can analyze your parking asset and show you what you're leaving on the table. We'll walk through your current performance, compare it to optimization benchmarks, and project the impact on your property value.

You need a way of thinking and a partner that creates value, not one that just extracts it.