Are Covered Parking Lot Structures Cost-Effective?
Today, covered parking structures serve a purpose beyond providing people with a place to park. Increasingly, parking lots are being designed with weather protection in mind, building value for the property and driving revenue for those businesses that charge for parking.
These covered parking solutions can be quite cost-effective as a long-term investment for your business. Covered parking structures can also provide weather protection for assets and inventory, and even qualify for tax incentives with the advent of solar-enabled covered parking solutions.
Whether you’re the owner of a car dealership or commercial property, or you manage an auto assembly plant or airport parking lot, consider how standard and solar-enabled covered parking structures can benefit your business and your customers.
How Much Do Covered Parking Structures Cost?
When deciding whether to invest in covered parking structures, business owners are confronted with whether these structures are worth the upfront investment. To determine whether covered parking will provide a beneficial return-on-investment, it’s important to get an estimate that is specific to your business and property. The cost of covered parking varies depending on the size and terrain of the lot, layout efficiency, and the desired structural design. When it comes to finding cost effective parking solutions, you will want a solution that is specifically tailored to your site and commercial application.
Generally, covered parking pricing is provided as a cost per square foot. Parking lots vary in size, from a handful of spaces to lots over 1 million square feet. The cost of a covered parking project depends on location, size, complexity, efficiency, and structural design. When reviewing costs associated with a covered parking project, you’ll discover that an effective way to offset the cost may be to incorporate solar panels into the structures.
Solar energy is a renewable resource that can save a business money on their utility bill, or even generate revenue by selling excess generated power back to the public grid. The payback is a function of the power produced in total. The overall project costs can be recouped by insurance premium reduction, utility savings, municipal and state renewable energy incentives, and state and federal tax credits.
Which Businesses Invest in Parking Protection
Investing in covered parking structures can be a wise decision for businesses across a wide variety of markets.
Car Dealerships and Auto Assembly Plants
Auto dealerships are one of the top investors in covered parking structures, primarily to protect their valuable fleets from hail. Annually, hailstorms cause billions of dollars in damage so it makes sense to invest in covered parking structures that will protect a business's assets. In addition, insurance premiums for auto dealers have been escalating over the last decade; some carriers have even stopped underwriting insurance for dealerships with uncovered inventory.
Once auto dealerships began adopting covered parking, other markets followed suit. Auto assembly plants hold massive inventory in their open lots, awaiting outbound distribution. While awaiting shipment, these new vehicles are staged out in the elements, exposed to damaging UV rays and the possibility of inclement weather.
Commercial and Travel/Destination Parking Providers
Commercial and Travel/Destination parking providers, such as airports, cruise terminals, train stations, and even grocery stores are also investing in covered parking structures to keep vehicles protected. For these markets, covered parking provides a benefit to the end-customer and can offer potential for additional revenue by offering a premium covered parking option. Integrating solar into a covered parking project can be a smart decision, particularly for publicly funded projects.
Some of the country’s largest auto assembly plants, auto dealer groups, and airports have invested in covered parking structures. They see their investment as a necessary asset that helps protect their inventory and serve their customers better. These businesses continue to see a return on their investment each year as they experience fewer financial losses related to inclement weather. They also increase the value of their properties and can even generate additional revenue by integrating solar panels into their project.
Benefits of Parking Lot Protection Structures
Is covered parking worth it? If you’re considering investing in parking lot structures, here are some of the top reasons to install covered parking structures:
1. Protect Vehicle Assets
Auto dealerships and assembly plants are home to millions of vehicles at any given time across the country. As one of the nation’s most vital economic contributors, the auto assembly and distribution industry requires ongoing innovation to maintain and grow their profits. Over the last 20 years, one of the most integral investments in the automotive industry has been covered parking.
In hail-prone regions, unpredictable weather can quickly cause millions of dollars in damage to new vehicles sitting on open lots. Sometimes, the damage can be so significant that brand new vehicles become a write-off, which can have a serious financial impact on affected business owners. Significant hailstorms can also temporarily halt operations.
Auto assembly plants and auto dealerships can install covered parking structures to protect their vehicle assets from the elements. Hail protection structures are structurally sound solutions that are custom built to meet the needs of each property and business owner, keeping vehicle inventories safe from the elements.
2. Provide an Up-Sell Opportunity
In addition to the many benefits of covered parking structures, these products also provide the opportunity for a business to up-sell their customers by offering a premium covered parking option. Covered parking can be a sustainable revenue stream for parking lot operators, eventually offsetting the initial investment and producing all profit following the ROI period.
3. Increase Commercial Property Value
Many real estate experts agree there are a few proven ways to increase the value of a commercial property. Having the ability to park under a covered parking space at a commercial property is often an overlooked luxury. It’s something we take for granted until covered parking spaces are unavailable. Covered parking is a valuable amenity, particularly for commercial businesses looking for ways to set their property apart in the marketplace.
4. Optimize Commercial Lease Rates
Occupancy can fluctuate greatly in commercial properties, making this a primary challenge within the commercial real estate market. To improve tenant retention, property owners need to find ways to make their commercial spaces more appealing to potential tenants in order to solidify long-term lease agreements.
By investing in covered parking structures, businesses provide their tenants with the convenience of shaded parking for their vehicles. In harsh winter climates, covered parking structures can keep snow off of vehicles beneath, saving the time and effort of having to remove that snow prior to leaving the property.
5. Maximize Rooftop Parking Use
Rooftop parking isn’t always a first-choice option, particularly during times of inclement weather. Many people avoid rooftop parking when temperatures are peaking or when storms are expected. Vehicle owners don’t want to risk their cars becoming damaged by hail or the sun's UV rays. Additionally, on hot summer days, exposed parking can make vehicle interiors unbearably hot.
Property owners can maximize the usage of the top deck of their garage by integrating pre-engineered covered parking structures. Cantilevered structures are ideal for rooftop parking projects, as the structural columns are placed away from parking spaces and drive lanes. They’re a convenient and cost-effective solution compared to completely enclosing the top deck with steel and concrete. Rooftop covered parking structures cost about 15 to 20 percent of the cost of enclosing the top deck.
6. Store Goods Safely
Many manufacturing facilities and warehouses use their surface parking lots for overflow inventory and parts storage. Though these open lots provide businesses flexibility in how they store their goods, it can also pose a risk if their inventory isn’t properly protected.
Manufactured goods stored outdoors are at risk of several threats. Many manufactured products today are susceptible to damage when exposed to UV radiation. Because of industry regulations, these products may not be allowed to be coated or manufactured with UV stabilizers, so they require physical coverage instead. In other climates, hail, wind and rain are the major threats to products stored outdoors.
By investing in protective structures, manufacturers can maintain the integrity of their inventory by reducing the risk of damage. UV and hail protection structures are uniquely designed to meet the needs of various industrial applications. These structures are built to suit the specific site to help increase the life cycle of manufactured goods.
7. Meet Local Regulations
In recent years, more and more municipalities are legislating parking lot shade ordinances as a way to combat urban heat island effect. Metropolitan areas tend to have higher temperatures than rural regions because the heat generated by urban activity gets trapped in densely populated areas. The urban heat island effect contributes to several environmental and health problems, including increased air pollution and energy consumption. As urban areas heat up, they require additional energy use to cool them down, straining the power grid. They also contribute to increased smog levels, which puts children, seniors and people with respiratory issues at risk.
Because of its climate and population, California was one of the first states with municipalities that implemented parking lot shade ordinances. Legislators needed a way to combat rising temperatures, protect local resources and improve air quality. Knowing how surface parking contributes to urban heat levels, local governments looked to parking lot operators to help solve the problem by requiring shade solutions.
Using a combination of trees, green space and covered parking structures, municipalities can can better address the urban heat island effect. Businesses operating in regions with parking lot shade requirements will benefit from the investment made in covered parking structures by providing shaded parking and ensuring compliance with local legislation.
Parking Structure ROI and Payback Period
As a long-term investment, covered parking structures can serve your property for decades to come. Businesses that install covered parking structures can reduce damage expenses by protecting their inventories from the damaging effects of inclement weather. ROI can also be achieved from the opportunity to up-sell covered parking at a premium rate; many airports across the country have invested in covered parking structures and realized accelerated ROI.
Covered parking also increases the property value of real estate and is a valuable feature that attracts and retains commercial and retail tenants.
Protect Your Commercial Lot With VPS
At VPS, we’re committed to driving innovative solutions in covered parking structures while protecting inventory/assets — which is why we now have the ability to incorporate solar panels into our covered parking structures. Adding solar solutions to parking structures enables businesses and municipalities to take advantage of renewable energy and reduce utility costs, while also protecting vehicles and inventory.
Incorporating solar panels into your covered parking project can also have tax advantages. At local, state and federal levels, there are more and more tax incentives available for businesses that invest in renewable energy such as solar.
If you’re thinking of investing in covered parking structures but aren’t sure if they’re cost-effective, adding solar panels can be a smart way to offset project costs. With the help of available tax breaks, reduced energy costs and revenue from power generation, businesses will find that solar-enabled covered parking is worth the investment and can be one of the smartest cost effective parking solutions out there.