Do offices with higher densities need more parking?

After a planning study, the Civica project in Cherry Creek, an office infill project with below-grade parking, determined to adhere to a 1.6 spaces per 1,000 square feet ratio, offering 215 parking spaces. The developer, Schnitzer West, intends to allocate office building permits at 2.55 per 1,000 sf. Courtesy Schnitzer West
Jeremiah Simpson Consultant, Walker Parking Consultants, Denver

Jeremiah Simpson
Consultant, Walker Parking Consultants, Denver

How can I add more parking spaces? It’s a question I hear frequently from office building owners, developers and property managers. Office building densities are rapidly increasing, and this has led to a desire to add parking spaces, sometimes up to a ratio of six spaces per 1,000 square feet.

Several decades ago, offices were designed to accommodate densities of 300 sf per employee, on average. Now, many owners are interested in developing or renovating their buildings to accommodate more open floor plates, sometimes referred to as lightly or fully demised.

The French word demise means “to give away.” In architecture, the term is used to describe boundary lines such as office walls and other dividers within the building. The theory is that millennials and certain industries such as architecture, design, technology, web- and application-based startups, and other “creative professionals” prefer open and more collaborative work environments.

Another factor is that less area is needed for paper storage. Items such as resource and law libraries, records retention, code books, manuals and plan sets are available in digital format. As a result, many office buildings are accommodating densities of around 200 to 250 sf per employee, with some companies even going as low as 150 sf per employee.

To accommodate this trend, commercial brokers and tenants are asking for more parking. Owners, whose buildings previously supplied somewhere in the range of 3½ to four spaces per 1,000 sf are struggling to find five to six spaces per 1,000 sf to attract new tenants and satisfy new lease commitments.

But is the quest to add parking spaces always the best approach?

Our recent studies confirm that the demand for parking at some office properties is increasing. However, from a commercial leasing standpoint, there also is significant evidence that many employers and brokers tend to overestimate their parking needs by around 20 percent because they don’t adjust for presence factor (i.e., the percentage of employees who many not drive to work on a given day or may not be present at peak hours due to meetings, paid time off, travel and telecommuting). Also, employers often underestimate the impact of transit use and other transportation alternatives on parking needs, especially in markets where monthly parking rates are high. It’s a mistake to assume that all employees want to drive to work or can afford to do so.

In many markets, an increase in employee density does not necessarily lead to a need for more parking spaces. Many of the industries mentioned above as candidates for higher density are also the same industries that attract younger, more urban and more progressive employees.

In markets like Denver, it is typical to expect drive-to-work numbers in the range of 30 to 40 percent within the downtown core, largely because much of the available monthly parking is expensive. For example, an unreserved permit sells for roughly $190 a month. Meanwhile, transit alternatives are plentiful as is the availability of new housing options located within walking or biking distance. With so many alternatives for getting to work and a healthy market for competing commercial parking, it doesn’t make sense to build to a very high ratio for new construction, regardless of the projected density of the building.

Outside of the downtown core, much of the new and proposed office building development is occurring at transit-oriented locations such as the River North neighborhood, Belleview Station, Orchard, the Fitzsimons campus, and along the new RTD lines servicing Westminster, Lakewood and Aurora. At these station areas, some owners may be considering the option of developing higher-density buildings and must decide whether they should park these buildings at a high ratio. They should keep in mind that high parking ratios often lead to more surface parking spaces and less density overall. This tends to counteract the effect of being at a location that is transit adjacent.

Many developers that are experienced with urban infill and transit-oriented development projects are seeking to park office buildings at a lower ratio with a plan to share this parking with a mix of evening and nighttime uses. An example would be One Belleview Station, which, at build-out, is expected to have a mix of residential, office and retail on a relatively dense infill footprint; the overall parking ratio provided is around 2.5:1,000.

At this and similar TOD locations, a lower ratio of parking spaces combined with appropriate parking policies – car share, eco pass, bike facilities on site and pay parking – can allow the development to function effectively. Tenants for this type of development generally are aware that there will be less parking available than at a more suburban location, and their employees typically value having access to transit and a mix of on-site uses over plentiful parking.

According to the Urban Land Institute, the typical parking demand generation rate for office is 2.55 to 3.55 spaces per 1,000 sf, based on the building size and density. Background research from the Institute of Traffic Engineer’s (Parking Generation, 4th Edition), confirms that this ratio should be enough to satisfy parking for up to at least the 95th percentile in terms of potential building densities. This statistic excludes medical office buildings, which have a higher need for parking than typical offices.

Evidence suggests that office building densities are increasing and some in the industry argue that this should mean that more parking spaces are required for new buildings. However, due to the trends in office building development, TOD projects and the needs of younger employees, it might prove shortsighted to build more parking for offices as a default. Instead, owners and developers should work with their consultants to approach each site as a new location and find a parking ratio that is a right fit for that building type, keeping in mind density, local alternatives and the impact of transit on the site.

In addition, developers working in today’s environment need to be aware of trends in technology that may change the way the industry views parking and access. Technologies such as driverless vehicles, the rise of Uber and Lyft, car sharing and other services are all trends to watch when planning for new buildings.

Does a plan for building density make sense when considering the parking supply? Absolutely. But is 6:1,000 sf the right parking ratio for higher-density offices? In many cases, I would suggest considering all the alternatives before building to a ratio that may not be needed in the near future.

Featured in the June issue of Office Properties Quarterly.

Edited by the Colorado Real Estate Journal staff.