Phoenix CBD Parking Rate Increasing, Despite Economic Doldrums, says Colliers Int’l Survey

Posted By Mike Padgett

July 8, 2009

PRESS RELEASE

PHOENIX, Ariz. – Despite the nation’s sluggish economy, with high unemployment and a significant drop in traffic, U.S. garage owners and operators are holding their parking rates at last year’s levels, or more, according to Colliers International’s ninth annual North American Parking Rate Survey.

In contrast, Canadian parking costs registered sizeable gains, reflecting a more robust marketplace. The annual survey tracks parking garage data in prime central business districts (CBDs) in 64 North American Markets.

Phoenix Central Business District (CBD)

• The Phoenix CBD median monthly-unreserved parking rate rose by approximately 23.8 percent to $65 per month, compared to $52.50 reported in 2008 and $35 in 2007.

• Phoenix CBD ranks as the eighth lowest in median monthly parking rates in the U.S., tied with Las Vegas and Columbia, S.C.

• The high monthly parking rate for Phoenix CBD is $75, compared to the $70 high in 2008 and $55 in 2007. The low monthly parking rate is $40, compared to $35 in 2008 and $25 in 2007.

• Daily median parking rates are reported at $9 per day, an increase of 12.5 percent ($1.00) over the $8 rate reported in both 2008 & 2007.

• The hourly parking rate ranges from $1 to $1.50 per hour and has remained the same since 2007.

“In the Phoenix CBD, parking garage operators have seen an increase in daily and evening usage due to several factors, such as the addition of Arizona State University to downtown, increase in governmental offices, new downtown entertainment venues, and the expansion of the Phoenix Convention Center, which enables Phoenix to participate in attracting 85 percent of all national conventions,” said Charles Miscio, senior vice president with Colliers in Phoenix. “The result is increased usage and rising rates.”

Miscio believes the introduction of the METRO light rail this past December is also affecting rates. “With the light rail’s capability of moving more people in and out of downtown, we are beginning to see entertainment venues and businesses shift from the Camelback corridor and other metro areas to downtown Phoenix to take advantage of light rail traffic. This shift is also driving more auto traffic into downtown, increasing parking garage usage and rates during both the daytime and evening. Over time, we can expect to see rates continue upward.”

Parking in the U.S.

Daily and monthly parking rates overall in the U.S. showed modest changes over the past 12 months (ending June 2009). Monthly median rates decreased ever so slightly by 0.9 percent to $154.23. Daily median rates rose by 1.2 percent to $15.96. Such relative steadiness in the face of this historic recession may be attributed to a continued imbalance between parking supply and demand.

The modest 0.9 percent drop in U.S. monthly parking rates is attributed to a substantial decline in office occupancies, which tends to push monthly rates lower. However, the drop in monthly rates was mild when compared to the significant weakness in the office sector.

Daily rates are more a function of the general economy and consumer spending. The increase of 1.2 percent shows that demand for daily parking remains remarkably strong even as the economy and retail sector continue to suffer. This underscores the strong ties people have to their cars.

Even though the economy is expected to remain sluggish and the labor market lackluster, drivers should not expect this weakness to manifest itself in lower parking rates. While higher fuel prices across North America have reduced the total number of miles driven, demand for parking seems to be more recession-proof, and this affords garage 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.

Monthly Median Rates – U.S.

Monthly parking rates range from a high of $700 in Midtown Manhattan to a low of $20 in Memphis. The five most expensive U.S. parking districts are (median monthly rate): Midtown Manhattan – $550: Downtown Manhattan – $500; Boston – $403; San Francisco – $350; Chicago – $325.

The five least expensive U.S. parking districts are (median monthly rate): Bakersfield – $40; Reno – $45; Ft. Lauderdale – $53; Memphis – $57; Walnut Creek, CA – $57. Phoenix ranked as the eighth lowest, tied with Las Vegas and Columbia, S.C.

“Colliers has been tracking the parking sector for nine years, and we have historically observed a direct link between the health of the office market and monthly parking—and the health of the consumer economy and daily parking,” said Ross Moore, executive vice president and director of market and economic research at Colliers International. “However, this year’s survey results truly showcase how resilient the parking sector is. We are undergoing an unprecedented time of economic hardship, job loss and contraction in consumer spending. And in the face of such challenges, parking rates nationwide have basically held steady, in many cases posting increases. Is parking immune to swings in the general economy? Watching rates as the next year unfolds may certainly speak volumes.”

Median Monthly Rates – Global

Outside North America, Colliers now tracks 76 markets around the world. Once again, London seized the top spot as the most expensive parking district in the world. The top-five most expensive parking districts in Europe, Middle East, and Africa are: London – City: $1,020; London – West End: $956; Amsterdam: $805; Zurich: $516; Milan: $495 (monthly median rate in USD).

For more information, visit www.colliers.com/phoenix.

(To avoid missing news and features on www.ArizonaNotebook.com, sign up for convenient email alerts in the FeedBurner box in the right rail. Your email address will not be used for any other purpose.)

(Comments from readers are moderated and will not appear until the administrator has approved them.)

(Ideas for interesting news stories about Arizona residents and the state’s business community are welcome. Please send your ideas and suggestions to Mike@ArizonaNotebook.com.)

Jul 8th, 2009

Comments are closed.