It should be no surprise that the bird’s eye view of most American cities is dominated by parking given that there are an estimated eight parking spaces per vehicle in the country. But if you ask the average city dweller, they will likely tell you that there is still not enough parking in their city.
While there are many explanations for this dynamic, most boil down to a mismatch of parking demand and supply of parking spaces. And this dynamic is crucial for owners of parking real estate to understand if they want to maximize the revenue potential of their properties.
Since parking facilities are part of the built environment, developers can’t easily relocate supply to meet demand. This means the focus must be on parking demand as the part of this mismatch that must be understood and managed well — and to do so requires data because what can’t be measured, can’t be managed.
AirGarage has first-hand experience working with owners of large real estate portfolios like CBRE, JLL, Hilton, and Starwood — all companies who place great emphasis on making sure they get the maximum value from their assets.
As the operator of hundreds of parking facilities for real estate owners just like these and as the builders of the only fully integrated parking management platform, AirGarage is best positioned to understand the complexities of local parking demand and to take advantage of this knowledge to maximize revenue per sqft.
Parking demand for a given facility is driven primarily by its proximity to nearby destinations, price to park, convenience of the parking process, and the physical appearance of the space. In short, drivers tend to park their vehicles near their final destination in affordable spots that appear safe and easy to use.
AirGarage has a fully intelligent pricing system that ensures parking is always priced at the market-optimal level, up to the minute. Additionally, AirGarage’s unmatched driver products and excellent service ensure that convenience and quality of facilities always attract drivers to a lot.
But a parking lot’s location is something that can’t be changed, which is why AirGarage also invests in understanding all of the demand dynamics at play with the location of a parking space.
To better understand location, AirGarage developed the Archetypes of Demand framework which describes the types of driver profiles served by different locations.
As one would expect, parking behavior varies widely by archetype. A driver parking for a basketball game in a nearby stadium is likely to arrive at a different time, stay for a different duration, and be willing to pay a different price than a driver parking for a quick visit to nearby shops.
This may sound intuitive, but parking lots are often located within a mosaic of different types of destinations.
Using geospatial analysis of map data, AirGarage is able to weigh the balance of various ‘pull factors’ that surround a parking location. This scoring process looks at a hyperlocal radius around parking locations (based on research on how far drivers are willing to walk to their final destinations) and identifies how much of each type of destination, whether it be restaurants and hotels or airports and stadiums, exist within a tight walking distance.
To see examples of the archetype system at work, take a look at the following two examples:
Example 1: Parking garage in St. Petersburg, Florida
Example 2: Parking garage in Baltimore, Maryland
In both of these examples, AirGarage’s location intelligence captures details about all of the ‘pull factors’ that draw drivers to an area — factors that a traditional parking management company may miss.
Additionally, AirGarage’s fully integrated platform provides a way to observe how drivers actually behave once they park. This allows hypotheses on how driver behavior differs between a retail parking lot vs. tourist hub to be validated with real occupancy data.
But how does this intel translate into extra value for real estate owners?
By accessing both archetype information on the types of demand serviced by a parking facility as well as actual data on driver behavior, AirGarage can confidently determine if a parking property (or general area) has too much supply given demand levels or if parking demand is outpacing supply.
Increasing parking demand
If data for a property indicates it is possible to increase demand, then AirGarage will do so. Parking properties have a fixed number of spaces, so maximizing the utilization of each space throughout the day/week/month is crucial for increasing revenue.
Archetype scores become very informative when determining how parking demand can be stacked or spread across time in this way. One common example of this in practice is selling additional monthly parking passes to nearby office workers who occupy spaces during weekday business hours but who won’t need space during busy nightlife hours. Knowing the location context for parking facilities is very useful when striving for 24/7 usage of a fixed asset.
If parking demand has peaked below a lot’s full capacity, AirGarage can continue to put space to use with non-parking partnerships. AirGarage has achieved this by sharing parking real estate with car fleets, cloud kitchens, mobile health clinics, and film studios.
Optimizing existing parking demand
In scenarios where AirGarage notices that parking facilities are operating near full capacity, additional value can be unlocked by better managing parking demand via dynamic pricing.
AirGarage’s dynamic pricing system has had great success in balancing a limited supply of spots with strong demand levels.
Furthermore, if demand is so strong in an area that existing parking supply can’t keep up, AirGarage has the ability to monetize parking lots for the first time.
Are you the owner of a parking lot or garage looking to increase your asset’s value? There is so much potential to add value to your property by first understanding the full context of parking demand around your location.
Let us show you how we can increase your net revenue with a
custom proposal for your parking facility.