Top Retail Trend: Converting Parking Lots to Profit

At shopping centers across the nation, owners and property managers are searching for innovative ways to combat the decline in foot traffic – and many are starting in the parking lot with good reason.

Reassessing parking needs and repurposing excess and underutilized space not only adds value to properties, but also delivers value to the communities on which these centers depend.

Bohler has been exploring alternative development options on behalf of our clients for quite some time, and we’ve been involved in numerous parking conversions from single-pad site creation to comprehensive property-wide redevelopment. We understand the potential these projects have to achieve business goals, as well as the drivers.

What’s Driving the Increase in Parking Lot Conversion Projects?

Advocates of parking space reduction argue it has positive environmental impacts, including mitigating heat islands and stormwater runoff. They also make the case that reducing parking space promotes the use of mass transit and ridesharing, which then reduces vehicle emissions and impaired driving incidents.

Shifts in consumer behavior is another contributor to the trend. As online shopping increases and as consumers continue to make more targeted visits to stores, there’s decreased need for excessive parking. People now prefer convenience and quick pickups, reducing the time they spend at shopping centers. As a result, the once-standard ratio of five parking spaces per 1,000 square feet of retail space is no longer justified.

For these reasons and others, municipalities are easing minimum parking requirements and the repurposing of parking spaces is accelerating.

SEE RELATED: Outside the Big Box Tips for filling empty retail space

Experiential Retail Replaces Parking Lots

Instead of parking, shopping center owners are focused on experiential retail options that attract and retain customers. Retailtainment venues, such as bars, restaurants, theaters, and bowling alleys, are becoming popular additions to shopping centers. These retail experiences generate foot traffic and create cross-marketing opportunities among shopping center tenants, and the high visibility and easy access to parking areas make them ideal sites.

Unless the property is supplementing its retail with entertainment that keeps people on the property, parking designed to historical ratios is underutilized.”

– Cornelius Brown, Regional Manager

Smart Strategies for Accelerating Your Parking Lot Conversion

For shopping center owners and developers seeking to adapt to new consumer behaviors and increase foot traffic by attracting more visitors, parking space conversion can be a profitable solution. Here are three time-saving site planning considerations to help you move a project like this forward faster:

1. Engage a Well-Versed Team.

To streamline the process of parking space conversions, partner with an experienced design firm. The firm will assist with concept development, planning, municipal approvals, and execution of the project. By collaborating on your vision and refining proposed ideas based on cost projections and operational considerations such as traffic patterns and peak operating times, a knowledgeable design team helps ensure a successful transformation.

2. Get Clear on the Unique Requirements of Specific Uses.

Starting a conversion project with a thorough understanding of its unique requirements and needs is essential for avoiding issues down the road. If you’re adding a restaurant, for example, the design team will need to address special utility connections, drive-through lanes, and parking needs for customers and take-out drivers. Similarly, if incorporating multifamily units to create a live-dine-play environment, the design team will help you determine the right number of apartments and amenities, estimate costs and construction time, and identify potential partners for the project.

“In some municipalities, developers are exempt from stormwater considerations if they’re maintaining or reducing impervious coverage, but in other areas, the rules are much stricter.”

– John Alejnikov, Associate

3. Understand Existing Parameters.

Avoiding unnecessary conflicts expedites projects. An experienced design team will chart a streamlined development process and guide the property owner through it smoothly, as well as ensure the project aligns with existing parameters or can be approved by municipal staff without extensive reviews. Early identification of potential unique or significant outlays of time or capital leads to informed decision- making. So, understanding costs related to specifics such as adding electric vehicle charging stations, complying with state-mandated stormwater management requirements (for larger projects), and other needs is key to profitability.

Bohler makes the site planning process as easy as possible for owners or developers and takes responsibility for accomplishing project goals efficiently and effectively. Your design team should do the same, providing comprehensive details for your proposed addition or redevelopment, including the impact on grading, earthwork, utilities, and stormwater management.

How Shopping Centers Win the Battle for Retail Foot Traffic

Achieving business objectives with parking space conversions requires expertise and innovation, making an experienced design firm an invaluable asset for landlords, leasing teams, and developers. By identifying potential challenges early and offering solutions, working within project parameters, and understanding how to go outside those parameters without triggering a stall, your design team will be your strongest asset and ally, helping you navigate your project in a way that saves headaches and protects your bottom line.