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Are Covered Parking Lot Structures Cost-Effective?

January.23.2024

Are Covered Parking Lot Structures Cost-Effective?

January.23.2024

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 businesses. Whether it’s a car dealership, a commercial property, or a distribution center, consider how standard and solar power-enabled covered parking structures can benefit the business and customers.

Whether you’re the owner of a car dealership, a commercial property, or a distribution center; or you manage an auto assembly plant or airport parking lot, consider how standard and solar power enabled covered parking structures can benefit your business and your customers.

Ready to add a parking lot structure to your business? Contact our team of experts today to learn about the variety of solutions we offer!

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How Much Do Covered Parking Structures Cost?

When deciding whether to invest in covered parking structures, business owners must determine whether covered parking will provide a beneficial return on investment (ROI). It’s important to get an estimate that’s specific to the business and property. The cost of commercial covered parking structures varies depending on the size and terrain of the lot, layout efficiency, and the desired structural design. When it comes to cost-effective parking solutions, find a solution tailored to the site and commercial application.

how much parking structures cost

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 or more. 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, businesses may discover that an effective way to offset the cost is to incorporate solar panels into the structures.

Solar energy is a renewable resource that can save a business money on its utility bill or even generate revenue by selling excess 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?

Covered parking structures can provide weather protection for assets and inventory and, with the advent of solar-enabled covered parking solutions, even qualify for tax incentives. Investing in covered parking structures can be a wise decision for businesses across various 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, also invest in covered parking structures to protect vehicles in loading and unloading areas, car rental lots, and other spaces. 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 wise 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, reduce their energy costs, and better serve their customers. 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 projects.

Benefits of Parking Lot Protection Structures

Is covered parking worth it? When considering investing in parking lot structures, here are some of the top reasons to install covered parking structures:

1. Protects 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 its profits. 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 they become write-offs, which can seriously impact business owners financially. 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 custom-built to meet the needs of each property and business owner, keeping vehicle inventories safe from the elements.

Hail protection structures are structurally sound solutions custom-built to meet the needs of each property and business owner, keeping vehicle inventories safe from the elements.

2. Provides 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 its customers by offering a premium covered parking option. It can be a sustainable revenue stream for parking lot operators, eventually offsetting the initial investment and producing all profit following the ROI period.

3. Optimizes Commercial Lease Rates

Occupancy can fluctuate significantly 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. Covered parking is a valuable amenity, particularly for commercial businesses looking for ways to set their property apart in the marketplace.

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 cars, saving the time and effort of removing that snow prior to leaving the property.

optimize commercial lease rates

4. Maximizes 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 they expect storms. 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 also protect pedestrians going in and out of the parking area.

maximize rooftop parking use

5. Reduces Environmental Impact

Parking lot protection structures offer environmental benefits that create positive outcomes for businesses and surrounding biodiversity. Some of these structures use HDPE fabric that pushes hot air out of the parking lot area, keeping the space more comfortable for biodiversity. It also helps lower the temperatures inside parked cars by up to 40 degrees, which reduces the amount of energy needed to cool the vehicle. Companies can also add native trees and vegetation to beautify the space and provide more shade, oxygen, and air filtration.

Solar panels on parking lot structures offer added environmental impact by enabling companies to use more renewable energy. Solar power plays a vital role in reducing emissions. Research shows that wind and solar power use in the United States cut CO2 emissions by 900 million metric tons from 2019 to 2022. Additionally, companies implementing these efforts may garner positive public perception from eco-conscious consumers.

6. Stores 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 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, such as distribution center loading docks. These structures are built to suit the specific site to help increase the life cycle of manufactured goods.

store goods safely

7. Meets Local Regulations

In recent years, more and more municipalities are legislating parking lot shade ordinances as a way to combat the 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 surfaces heat up, they require additional energy 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.

Municipalities can better address the urban heat island effect using a combination of trees, green space, and covered parking structures. Businesses operating in regions with parking lot shade requirements will benefit from the investment in covered parking structures by providing shaded parking and ensuring compliance with local legislation.

meet local regulations

8. Cuts Energy Costs

Parking lot protection structures make room for solar panels, which can help companies save on their energy bills by reducing their need to draw energy from the grid. In the right location, businesses may even be able to make or save more money with surplus energy. They can increase their revenue through net metering, where they sell excess energy back to the grid, creating a passive revenue stream.

Even in cloudy areas, solar panels can typically generate sufficient energy for businesses to run daily operations or reduce the amount of energy they would need to pull from the grid. By investing in parking lot structures and adding solar panels, companies can increase the value of their property. The initial investment is worth it because businesses reap the rewards almost immediately, and it provides long-term returns.

Parking Structure ROI and Payback Period

As a long-term investment, covered parking structures can serve a 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.

parking structure roi and payback period

FAQs About Covered Parking Lot Structures

Covered parking lots are an excellent way for businesses to improve their property appeal, but there may be some confusion about what they actually offer. Here are the most common questions on this topic:

What Is Covered Parking?

Covered parking is parking with a full or partial roof structure that provides shade and shields cars from harsh weather conditions.

Is Covered or Uncovered Parking Better?

Covered parking is better because it reduces the amount of dust buildup on vehicles, keeps cars and patrons cooler, and lowers the risk of weather damage. It also makes commercial spaces appear more secure and professional.

Can People Make Money From Building a Parking Lot?

Building a parking lot, especially a covered one, which provides a sheltered space for people to park, can be profitable. Businesses can also profit from parking lots by incorporating solar panels and selling excess energy back to the grid in applicable states.

What Are the Benefits of Parking Lots?

The benefits of parking lots include improved property appeal, better customer experience, enhanced safety, and vehicle protection.

Protect Commercial Lots With VPS

VPS is the market leader in parking structures. We’re committed to driving innovative solutions in covered parking structures while protecting inventory and assets — which is why we now have the ability to incorporate solar panels into covered parking structures. Adding solar solutions to parking structures enables businesses and municipalities to take advantage of renewable energy and reduce utility costs while protecting vehicles and inventory.

Incorporating solar panels into covered parking projects can also have tax advantages. At local, state, and federal levels, there are increasing tax incentives available for businesses that invest in renewable energy such as solar.

Adding solar panels can be a smart way to offset the project costs of covered parking structures. With 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.

Contact an expert at VPS today to learn more about solar solutions or our other customizable hail protection structures.

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