The Evolution of the Lowly Parking Lot

Car Park - Parking

Parking lots have become more than just parking lots. Since the onset of COVID-19, we’ve witnessed an expedited evolution of parking lots and spaces: from an over abundant eyesore of asphalt to a buzzing hub where communities can begin to rebuild and businesses can begin to recoup lost revenue. Walmart parking lots have been transformed into drive-in theaters to host movies and virtual concerts. Ghost kitchens and food trucks are springing up in empty lots across the country. Main Street has been taken over by outdoor eating areas that extend beyond the sidewalks and into the parking lanes. Retailers are offering customers “contactless” experiences through curbside pick-up, and pop-up distribution centers are occupying vacant lots in the form of freight containers. Parking lots might be peaking. 

Despite the sometimes overwhelming heat, the summer months have provided an opportunity for businesses throughout America to try and utilize their outdoor spaces (namely, parking) to generate income. Depending on where you live, the weather, zoning, and the current COVID-19 restrictions in place, this utilization of parking will vary. When I drive through the shopping areas of the towns nearby in the suburbs of northern New Jersey, I see the restaurants who’ve pitched permanent tents in their lots to accommodate outdoor seating because in NJ, indoor dining is still prohibited. At the shore towns nearby, outdoor seating in the summer was always common, but now restaurants are maximizing every inch of space. Shops and stores have been allowed to reopen in NJ, but they’re still extending their lease lines as far as possible using outdoor displays and signage to signal customers that it’s safe to shop. 

Whereas in other parts of the country like Florida, outdoor dining is being used to supplement space and revenue, as indoor dining (in most counties) is open but limited to 50 percent maximum occupancy. I spoke with Larry Silvestri, the president of Silvestri Law, PA, who was in-house general counsel for various retail developers for over twenty-five years and is now in private practice in St. Petersburg, FL. Silvestri explained that even with the extended outdoor dining and limited indoor dining, “there is still sometimes a wait, and this indicates demand.” Hopefully, the demand continues to grow and states continue to move forward with reopening plans. But until a vaccine is approved, we may come to rely on parking lots and outdoor spaces more heavily.

I asked Silvestri if he thinks that future leases will adapt to include the use of parking and outdoor spaces. “Recently, I heard someone ask, ‘Now that tenants are using outdoor spaces to conduct business, are landlords trying to charge them for it?’ The answer is no. Landlords are more concerned about the survival of their tenants,” said Silvestri. It’s in the landlord’s best interest to be flexible and help the tenant through this challenging time. If using the parking lot for purposes other than parking works to accomplish this, landlords are going to be supportive regardless of what the previous lease terms might have been. “The reality of the day trumps whatever the leases might say,” he explained. Perhaps the lease doesn’t account for curbside pick-up and calls for all parking areas outside of entrances to remain clear. Right now, those lease terms are negligible, especially if curbside pick-up is what is keeping tenants afloat.

Florida, along with the rest of the southern U.S., may be dealing with extreme heat right now, but the area has the distinct advantage of remaining open year round in most cases. In Glendale, California, restaurants are using the local mall’s parking garage for seating, which may not be the most scenic place to eat, but it provides shelter from the elements and extends the property’s ability to serve its customer despite challenges posed by weather. The question remains if parking lots will continue to be utilized when the seasons change. Many business owners are already preparing for weather fluctuations but investing in outdoor heating and cooling technology, which includes special fans to circulate cool air and portable heat lamps. We may very well see people eating outdoors year round, but instead of tank tops and sandals, they’ll be wearing boots and jackets.

Outdoor space, including parking lots and garages, very well may become a staple for commercial properties. According to Nick Romito, CEO of VTS, a CRM software company for real estate, “For retail, it’s not just about the physical buildings housing inventory, the exterior parking lots and their permitted uses are now of tremendous importance and value. For example, we’re seeing Chick-fil-A using parking lots as an extension of the restaurants, Best Buy using their lots to offer pickup options, and malls building open-air suites in parking areas as a way to replicate the in-store shopping experience. They’re not just parking lots anymore, they’re a component of the total retail offering.” Parking lots have the unique flexibility to adapt to the current needs of its adjacent indoor space.

The flexibility that parking lots provide is helping companies like Reef Technology re-envision the evolution of parking lots primarily to act as food service and distribution hubs. The pandemic has opened up our eyes to the full spectrum of ways that we can use our parking lots. Some of these uses might be superfluous once we feel safe enough to return to our buildings but some of them will likely prove their worth and become permanent fixtures in our urban environments.

Parking lots also have the advantage of being plentiful and, in many cases, underused. In a recent Propmodo article, we found that there were 16.7 parking spaces available for every household in the United States. Similarly, in New York City alone, the amount of spaces reserved for private car storage equates to 33 square miles—roughly the size of Miami. These figures seem a bit excessive and are driven by a nation that was largely dependent on privately owned cars for many years. More recently, however, urban planning has focused on walkability as a feature and more people have begun to rely on public transit or rideshare platforms out of convenience, moral obligation, and economy.

Now, this way of life May also be threatened by COVID-19. Just as people do not wish to eat indoors or be in enclosed spaces with others, they do not wish to use public transportation. Blank recently reported that wealthy New Yorkers who have fled the city and stayed in the Hamptons for the summer are planning to extend their stays into Fall and commute back and forth to the city via helicopter services. Whether an attempt to avoid public transportation or out of convenience, it indicates a trend toward increasing use of private transportation. Subway ticket sales have seen steady declines since the onset of COVID-19, and car sales have been on the rise. It’s quite possible that we may at some point need our parking lots for the use for which they were originally intended—parking cars. 

If that’s the case, parking lots may become ultra valuable in that they serve so many purposes. Empty parking lots (which may not be so empty in the near future) are one of the keys to rebuilding economic activity as we wait for a vaccine to become available. What was once considered the armpit of many communities has now become its savior. Empty lots filled with concrete, weeds, and shattered glass are not what you think of when it comes to a thriving community center but with a little TLC (and permitting help from local municipalities) they could become a large part of our shared public services. While parking lots may not be undergoing a technological evolution, they are certainly experiencing substantial change for the better. Who knew the lowly parking lot had such potential?

Image - Design