Parking Ratios in Industrial Real Estate
Industrial properties typically have between one and two parking spaces per 1,000 square feet, but it may need to be higher depending on the facility's use.
What Parking Ratio Do I Need for an Industrial Property?
A parking ratio is a metric that describes the available parking at a commercial property. This figure is generally expressed as a number of spaces per 1,000 square feet of rentable space. For example, if a 1 million-square-foot distribution center has 800 parking spaces, it would have a ratio of 1.25 spaces per 1,000 square feet.
Different asset types have different ranges for what an ideal parking ratio is — and it is also dependent on myriad other factors, including location, tenant types, and more. Furthermore, local regulations set by planning or zoning commissions may require certain parking ratios for properties in zoned areas. While a developer can often apply for a variance to accommodate parking that falls outside this ratio, it is good to keep in mind.
Industrial properties typically have parking ratios between 1 and 2, while office buildings generally have a much higher ratio — as high as 4 or 5, depending on location. This disparity stems from the higher density of people present in a typical office building compared to an industrial asset.
In terms of geography, parking ratios are typically much higher in suburban or exurban areas. A Manhattan last-mile warehouse may only have a handful of parking spaces, while a distribution hub 30 miles west in Northern New Jersey would likely have a significantly higher ratio. This suburban/urban difference is true for retail and office asset types as well.
ADA Compliance
In addition to the previously mentioned considerations, parking must also comply with the 2010 update to the Americans with Disabilities Act, which sets out clear requirements for accessible parking. The ADA does not require a specific ratio, however — but instead mandates a set number of accessible parking stalls depending on the total parking available at a property.
The government’s table with more detail can be found here, but broadly speaking, if a property has more than 500 but fewer than 1,000 spaces, a minimum 2% must be designated as accessible parking. For properties with fewer total spaces, the percentage is slightly higher. Additional restrictions also apply for van-accessible spaces.
Related Questions
What is the typical parking ratio for industrial real estate?
The typical parking ratio for industrial real estate is typically lower than for other types of commercial real estate, such as retail. According to this source, cities often have commercial zoning ordinances that set minimum parking ratios, which may vary based on property type; for example, retail projects may require a higher parking ratio than industrial developments.
What factors influence the parking ratio for industrial real estate?
The parking ratio for industrial real estate is typically determined by the size of the building and the type of tenants that will occupy it. For example, industrial buildings that are used for manufacturing or warehousing may require fewer parking spaces than those used for office or retail purposes. Additionally, the local zoning regulations may also influence the parking ratio, as some areas may require a certain number of parking spaces for a given building size. Finally, the cost of constructing and maintaining the parking spaces may also be a factor in determining the parking ratio.
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How does the parking ratio for industrial real estate compare to other types of commercial real estate?
The parking ratio for industrial real estate typically varies depending on the type of industrial use. For example, warehouses and distribution centers may have a lower parking ratio than manufacturing facilities, since the latter may require more parking for employees and visitors. Generally, industrial real estate has a lower parking ratio than office buildings, since industrial tenants may not need as much parking for their employees and visitors.
For more information, see CBRE's Industrial Real Estate Outlook 2020.
What are the benefits of having a higher parking ratio for industrial real estate?
Having a higher parking ratio for industrial real estate can be beneficial for potential tenants, as it can make the building more desirable. Higher parking ratios can also lead to higher common area maintenance fees (CAM), since tenants usually pay rent on their portion of a building's common areas, which often include parking spaces. Additionally, research suggests that office building tenants are asking for more parking, and many developers are responding by adding more parking spaces to their current developments, increasing their parking ratios. Though adding parking spots can be expensive, developers are often seeing this as an investment that may be able to improve the long-term occupancy of their projects.
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What are the drawbacks of having a lower parking ratio for industrial real estate?
Having a lower parking ratio for industrial real estate can lead to a less desirable property for potential tenants. This is because tenants may need more parking spaces for their employees, delivery vehicles, and other needs. Additionally, having a lower parking ratio can lead to higher common area maintenance fees (CAM) since tenants usually pay rent on their portion of a building's common areas, which often include parking spaces.
How can I calculate the parking ratio for a specific industrial real estate property?
You can calculate the parking ratio for a specific industrial real estate property by taking the number of parking spaces and dividing it by the property's square footage in thousands of feet. For example, a 20,000-square-foot building with 100 parking spaces would have a parking ratio of 5 (100 ÷ 20 = 5), or 5 spaces per 1,000 square feet.
Number of Parking Spaces ÷ Square Footage of Property = Parking Ratio
You can find more information about parking ratios in commercial real estate here and here.