Midtown & Buckhead Have a Problem, and It’s Not Just High Rents - Transcend Commercial Real Estate Brokerage

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April 18, 2019

Midtown & Buckhead Have a Problem, and It’s Not Just High Rents

Midtown & Buckhead Have a Problem, and It’s Not Just High Rents

The surging rents and traffic congestion are bad enough, but Buckhead and Midtown are increasingly facing another obstacle in trying to land new tenants: parking.

Even newly constructed buildings don’t have enough spaces to meet demand, while denser workplaces with more employees per square foot exacerbate the problem. That’s forcing tenants to pick and choose which employees can park in the deck, and parking management companies often have long wait lists for parking spots that become available.

Employees who don’t win the proverbial parking lottery are left to their own devices in hunting for spaces at nearby privately owned surface lots or decks, which often have higher daily rates than monthly parking contracts.

Some employees resort to using on-street parking spots managed by companies such as ParkMobile, and accept their fate in getting parking tickets or the occasional boot when they overstay the limits of what are meant to be short-term parking spots.

Parking is so scarce at certain buildings in Buckhead that some tenants at a coworking space in Terminus say they’re forced to park at the nearby Lenox and Phipps mall parking lots and walk a few blocks to their office.

Another sign of parking’s scarcity in Buckhead: Terminus is imposing a 3% escalation on parking rates starting in January 2020, which is extremely rare.

We’ve also heard of tenants bailing on Midtown and Buckhead altogether and relocating to the Central Perimeter area, where parking ratios tend to be higher and some buildings such as Galleria still offer free parking.

Executives who are considering moving to or renewing leases in Midtown and Buckhead have legit concerns that the lack of parking might hurt their efforts to recruit employees. How are they going to attract the best talent when people are on their own for a basic need like parking?

MARTA, carpooling, biking, e-scooters and other alternatives aren’t always viable options, especially when employees live in areas that are far away from a mass transit station or have obligations such as picking up children from schools or daycares that aren’t near public transit.

Some economists and urban planners say that higher parking prices could be part of the solution because it incentivizes people who can take other forms of transportation to do so, which frees up scarce parking spaces for those who need to drive.

The concept works remarkably well in other cities.

In Washington, D.C., the district’s ParkDC program partnered with Conduent Transportation to use predictive analytics, cameras and sensors to build a demand-based pricing model that charged more during peak times. The program boosted occupancy by 12% in underused areas and increased parking availability by 5%, and ParkDC won a national innovation award from the National Parking Association.

Los Angeles has a program called LA Express Park that shows real-time parking availability and variable pricing. In the first few months of the pilot test, parking congestion fell by 10% and spaces were easier to find.

A few years ago, Seattle also implemented a performance-based approach with cheaper rates at non-peak times and met its goal of having one to two parking spaces open on every block at all times in the business district.

To be sure, Atlanta’s embrace of apps like ParkMobile, dedicated bike lanes, e-scooters and other forms of transportation have been a step in the right direction.

But as a sprawling city where the average commuter spends two hours a day roundtrip in the car, Atlanta needs to take a more proactive stance on the parking front.

We hope to see more innovation around real-time parking availability and demand-based pricing, plus more coordination among the dozens of municipalities and public and private lots across the metro area.

Atlanta has a long history of reinventing itself, dating back to Atlanta’s rise from the ashes after Sherman’s March to the Sea destroyed much of the city in 1864.

We think Atlanta’s civic leaders, urban planners and developers are up to the task of rethinking their collective approach to parking, and look forward to the day when there are always spots available.

Are parking struggles affecting your company’s real estate decision making? We can help. You can reach us here.

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