Why Landlords Don’t Like Reserved Parking

Most properties provide parking for tenants, visitors, and/or customers at certain ratio. This parking ratio, generally expressed as parking space per thousand square feet, is calculated by dividing the total number of parking spaces by the rentable building area. For example, a 100,000 square foot office building with 360 parking spaces has a 3.6/1,000 parking ratio. Minimum ratio requirements are determined by a number of factors including property type, proximity to public transportation, etc. Tenants are allotted a certain number of parking spaces based on the building’s parking ratio. For example, a tenant that occupies 8,000 square feet in a building with a 3.2/1,000 parking ratio would be entitled to 25.6 parking spaces (usually rounded up).

If tenants have a right to a specific number of parking spaces based on the amount of space they occupy, why are landlords often reluctant to provide reserved spaces? The reason is that reserved spaces effectively lower a building’s parking ratio and can negatively impact other tenants, visitors, and/or customers.

When a space is reserved only the person/tenant for whom it is reserved can park there. While this is obvious and the point of reserving spaces it does not tell the entire story. What happens when the tenant is home sick, out of town, etc.? Otherwise perfectly good parking spaces are sit unused/wasted. The landlord runs the risk of creating a situation in which they cannot accommodate additional tenants, visitors, and/or customers even though they have empty parking spaces. You may have experienced this phenomenon and the resulting frustration firsthand, if you’ve ever driven past reserved space after reserved space, level after level as you look for parking in a building parking garage.

As a result, landlords will typically only reserve spaces for highly desirable tenants; those that are taking substantial square footage, national/credit tenants, etc. Even in these situations landlords will limit the number of reserved spaces to a fraction of the amount allotted to the tenant per the building’s parking ratio. In office properties this amenity is typically reserved for executives or officers of the company while in retail they are for the benefit of customers with employee parking areas being located far from or behind the leased premises.

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