Parking Lots and Facilities Reported Close to Recession-Proof

More than ever, investors are looking for good business opportunities and ways to protect their investments from recession. Parking may offer that solution.

Economists, research firms and other organizations are consistently reporting that parking lots and facilities are good investment opportunities in the commercial real estate sector.

Parking Investment

When asked why institutional capital is attracted to the parking industry, Emanuel Eads, CEO of Central Parking (USA), stated: “Well, it’s three simple words: earnings, cash, growth.” Those three items make the parking industry ripe for the picking as investors look to diversify away from volatile stocks and vulnerable bonds, according to a 2008 Parking Today article.

“Demand for parking seems to be more recession-proof, and this affords space owners and operators the opportunity to hold prices close to year-ago levels. Moreover, when the economy rebounds, the markedly rising parking rates of years past are expected to return, according to Colliers International in 2009.

A 2010 National Parking Association study reported that the only operations sheltered from recession were Central Business District (CBD) municipal operators, colleges and universities, and hospitals.

A CNBC article Parking Lots Offer Safe Haven for Real-Estate Investors (December 2011) stated: “A surface parking lot offers a good rate of return and its rewards are as close to being recession-proof as you’re going to get,” says Ross Moore, chief economist for Boston commercial real estate firm, Colliers International.

The Alternative Asset Alliance newsletter says, “Investors are beginning to realize that a well-located urban parking facility offers stable, long-term revenue growth and that this asset class is becoming an important part of any diversified real estate portfolio.”

There seems to be a consensus that investing in well-located, high-density parking facility is an excellent option for diversifying a portfolio as well as a hedge against recession.

Of course, the numbers overwhelmingly favor the US parking industry, which grosses some $25–30 billion annually, according to the International Parking Institute.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s