How to Maximize Profits
Making the Most of Your Parking Operations:
When it comes to creativity, more often than not, it’s sparked by simply looking at things through a different prism. Clearly, for building owners, maximizing the value of each asset is critical, particularly given the impact of Covid-19 pandemic. While the pandemic has created significant challenges, it has also created an impetus for building owners to analyze their portfolios, including the parking assets. Ultimately, this is a time to find and explore ancillary revenue-generating sources.
While the pandemic has created significant challenges, it has also created an impetus for building owners to analyze their portfolios, including the parking assets.
This is exactly what Hertz Investment Group has done after vetting numerous parking technologies and innovative applications. As a result, Hertz has implemented a number of value-add initiatives to create new revenue streams. Once considered a crucial but very single-use type of asset, parking is now being repurposed in several ways. Some of the uses include advertising and ghost kitchens, while new technology has made the vision of contactless parking a reality.
Below are a few of the latest trends Hertz has implemented generating additional revenue.
1) Ghost Kitchens. Ghost kitchens are restaurants with no dine-in space for customers. They operate on a delivery-only basis with no shop front; they literally are just a kitchen where orders are prepared and distributed.
Brookhollow Central, a Hertz office complex in Houston, Texas, has a ghost kitchen on-site, which was previously occupied with a trash compactor; now it is generating revenue. According to The Hartford Business Journal, by 2030, ghost kitchens will be a $1 trillion industry. They are also being touted by multiple media outlets -- including The San Francisco Chronicle -- as the wave of the future of takeout eating. And Hertz is well-positioned to make the most of this new opportunity.
2) Contactless parking. Key cards, paper tickets, and cash are now a thing of the past. Today, the parking experience can be controlled through a smartphone. This currently allows parkers to enter and exit the parking facility simply by dialing a phone number. Hertz has deployed contactless parking technology at multiple properties, simplifying the entry and exit process. This touch-free method is more sustainable and a bonus in the era of Covid.
3) New technology. License Plate Recognition (LPR) is another example of contactless parking which has also been implemented by Hertz. It is an image-processing technology used to identify vehicles by the use of license plates. LPR allows contract parkers and transient parkers to forego the use of a key card or ticket to enter and exit the parking facility, which also allows for faster loading and unloading of the parking facility.
4) Drones for package delivery. New technology will revolutionize how parking structures and rooftops are operated in the future. One concept will allow rooftops to be utilized for drones dropping off packages for delivery. As parcels are dispatched to parking structures, building rooftops or drone ports, they will make their way to a delivery vehicle within the parking structure that will bring the packages to recipients’ doorsteps, significantly expediting the delivery process.
While drone delivery hasn’t yet hit the mainstream, according to Yahoo Finance and C|Net, the world may see full-scale commercial delivery drones in perhaps a couple of years. In the meantime, America’s largest retailer is now doing deliveries by air. Walmart has partnered with DroneUp to launch three full-time airport “hubs” for aerial deliveries to customers.
5) EV Charging Stations. With the increase in popularity of electric vehicles, Hertz will continue to install more charging stations throughout the portfolio to accommodate the increased demand. According to Bloomberg, electric vehicle sales are projected to increase sharply, rising from 3 million in 2020 to 66 million in 2040.
6) Advertising space. While some may only consider floor space when calculating square footage, another potential opportunity is the exterior leasing of parking garages for advertising. This is accomplished by using the sides of the parking structures as billboard spaces which are wrapped in a printed but see-through mesh, making them glance-worthy and revenue generating. Hertz is working with advertising companies to capitalize on this alternative use.
All of the aforementioned implementations take an interesting and novel approach at using, in some cases, untapped space on a property, that can and will generate revenue. When coupled with the innovative apps and business models that operate outside the box, those who manage parking operations will continue to lead the industry by optimizing the potential added value. And that’s money in the bank.
Larry Isrow brings more than 30 years of parking experience to his position as Vice President, Parking Asset Manager for Hertz Investment Group. He can be reached at LIsrow@hertzgroup.com