The privatization of New York city's nearly 90,000 parking spaces has been all over the parking investing news lately. This article tells why it is happening and why parking investments are only going to get better in the future.
Exciting Investment Opportunities Await In...Public Parking
By Harris Kenny & Leonard Gilroy
U.S. policymakers in Chicago, Indianapolis and elsewhere have recently begun to unlock value trapped in a neglected treasure: municipal parking assets. This might not seem like a hot topic, but for investors seeking new places to park capital, creative partnerships to invest in and manage city parking garages, meters and lots are increasingly attractive.
Parking is a historically commercial activity that governments have partially captured. And in many cities the public sector is competing alongside the private sector to provide parking. Therefore, it makes sense that innovative policymakers are seeking to leverage commercially viable assets and shift their role in parking operations to an eager and competitive industry. And institutional investors, pension funds and the like are increasingly interested in investing in public infrastructure assets like parking, lured by a drive for steady returns (typically in the 10-14% range) amid the post-recession flight to quality.
This report shows the break down of state and local governments that have attempted to privatize their parking assets. It is a great bench mark for the future of parking investments.
Reason Foundation’s Annual Privatization Report 2010 declared that parking assets had become a hot privatization opportunity for local governments. This trend continued in 2011, led by an innovative agreement signed in Indianapolis. Chicago’s previously maligned parking meter privatization deal has been vindicated. Meanwhile major cities such as New York, Pittsburgh, Sacramento, Memphis and Harrisburg are exploring parking asset privatization. And in an unprecedented development, Ohio State University (OSU) began procurement for the first parking asset privatization by a public institution of higher education.
Parking asset privatization has captured the attention of lawmakers, journalists and pundits across the political spectrum. For example, in the April 14, 2011 episode of National Public Radio’s Marketplace program, host Kai Ryssdal effectively summarized the appeal of parking privatization saying,
Paying to park your car on a public street is one of those things that you just kind of have to do. It’ s not like parking meters are going away, and they do keep people from hogging the best spots all day. As an added bonus, parking can be a pretty good moneymaker when cities are short of cash. And there are a whole lot of cities in exactly that situation right now. Cities that are trying to make ends meet by leasing out parking to the private sector.
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