Fulton Market is one of the fastest-growing neighborhoods in Chicago. Thousands of new apartments and over one million square feet of office space have been built in the area since 2017.
Despite retail rents tripling in that time period, Paul, the owner of a 130-space parking lot on West Lake Street, was not seeing any financial benefit. He was receiving a flat lease payment from his parking operator, who had no obligation to be transparent about how much revenue the property was generating.
After helping Paul conduct a parking revenue audit, he decided it was time to make a change and gave AirGarage the opportunity to manage his parking lot.
Paul appreciated the predictable income his lease provided for nearly a decade. He assumed his parking management company was providing him with a market rate deal, unaware that during peak season the property often generated more than 3x his monthly payment.
Unfair lease structures are common in the parking industry. Like Paul, many parking lot owners have a variety of commercial properties to manage and aren’t experts on parking operations. They put a lot of trust in their parking management company to treat them fairly and be transparent regarding revenue and operations. Unfortunately, many parking companies take advantage of property owners by offering low-ball lease deals and obscuring revenue data to maximize their profit margins.
When AirGarage approached Paul to offer him a better deal, he was hesitant to give up the security of a lease for a revenue share. However, after speaking with our team he started to become curious about how much money he was leaving on the table each month, so he agreed to allow AirGarage to provide a complimentary parking revenue audit.
Using a proprietary parking revenue audit system installed at the lot, AirGarage assessed the occupancy levels and parking session durations for all vehicles over a 30-day period.
After completing the audit, AirGarage’s data proved to Paul that the parking lot was seeing far more traffic, and generating far more revenue, than his current lease suggested. The audit also revealed he could earn far more income each month by converting his property to AirGarage’s full service parking management with a more transparent revenue share agreement.
With AirGarage, Paul receives the majority of the parking revenue each month, and he has access to an online dashboard that provides real-time data updates on every transaction. AirGarage provided Paul with a level of financial and operational transparency he had never seen before.
AirGarage increased Paul’s monthly income immediately upon taking over the management of the parking lot. In the first month, despite heavy snow in Chicago, he saw a 29% NOI lift. As the year progressed and AirGarage began implementing features like dynamic pricing and enhanced enforcement, revenue continued to increase.
The results have been incredible and Paul is thrilled with AirGarage's performance. In the first year after AirGarage began operating the property the total NOI lift was 41.6%.
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